Algeria threatens to cut gas flows to Spain in spat over Morocco

Spain had told Algeria that it would start sending gas to Morocco via the Maghreb-European pipeline. PHOTO: EMPLPIPELINE.COM

MADRID (BLOOMBERG) - Algeria threatened to cut natural gas supplies to Spain in an apparent escalation of a diplomatic dispute with Morocco.

The Algerian energy ministry said it may terminate supply contracts with Spain if the European country sends any Algerian gas on to other nations, Algeria's state-run news agency APS said late on Wednesday (April 27).

The warning came after Spanish Energy Minister Teresa Ribera told her Algerian counterpart that Madrid would start sending gas to Morocco via the Maghreb-European pipeline.

Spain has discussed the use of the pipeline with Algeria in recent months and its decision was communicated on Wednesday, according to a statement from the Spanish government.

It's unclear if Algeria would follow through on its threat if Spain sends non-Algerian gas to Morocco. Leila Benali, Morocco's energy minister, said in an interview in February that Morocco wants to buy liquefied natural gas and send it to Spanish re-gasification terminals. It would then be piped to Morocco through MEG, she said.

The Moroccan energy ministry didn't immediately respond to a request for comment.

The quarrel is yet another threat to Europe's energy security. Russia halted gas flows to Poland and Bulgaria on Wednesday as part of a retaliation against sanctions for its invasion of Ukraine. Algeria provides Europe about 8 per cent of its gas imports, making it the biggest supplier after Russia and Norway.

Gas normally flows through the Maghreb-European pipeline, known as MEG, from Algeria to Spain via Morocco. But Algeria stopped sending fuel through it late last year when it cut diplomatic ties with Morocco because of a spat over Western Sahara.

Algeria recalled its ambassador to Spain last month after Madrid ended its longstanding policy of neutrality toward the territory and backed Morocco's plans for limited autonomy.

The Morocco-Spain section of the MEG line is owned by companies from Morocco, Spain and Portugal. They can reverse the flows without Algeria's consent, according to Morocco.

Spain is still receiving Algerian gas through the Medgaz line, which doesn't cross Morocco, and as LNG. Algeria also has a gas pipeline that connects to Italy.

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