Will Morocco’s LNG strategy fuel energy independence or ignite geopolitical tensions?

With an emphasis on liquefied natural gas (LNG) imports to support its infrastructure and energy security, Morocco recently revealed a substantial change in its energy strategy. From past, slower-moving energy policies, this represents a significant turnabout. Pushing for LNG could change the country’s place in the regional energy environment as global energy dynamics change.

The arguments

Strengthening Energy Security

A significant step in the direction of sustained energy independence is represented by the new LNG policy. Morocco wants to address its increasing energy needs, especially for industrial sectors like car production, by building several terminals. These terminals are necessary to maintain economic growth given that petrol consumption is predicted to increase from 1 billion to 8 billion cubic meters by 2027.

Diversifying Energy Imports

Morocco’s efforts to diversify its energy sources depend heavily on its agreements with corporations like Shell to secure LNG supply. The nation gains more negotiating leverage in the global energy market by reducing its reliance on Algerian gas. Furthermore, re-exporting to Europe and other new economic prospects may arise from integrating LNG into the pipeline system.

Geopolitical Risks in Western Sahara

There is a chance that the proposed LNG facility in Dakhla would come under international investigation. Foreign investments or infrastructure projects in the Western Sahara could lead to objections from other nations and complicate Morocco’s relationship with global powers, as the region is still politically disputed.

Balancing LNG with Renewable Energy

Morocco’s energy needs can be met more quickly by LNG, but it is admirable that the nation is also investing in renewable energy sources. The difficulty is striking a balance between the two strategies: investing in green energy for long-term sustainability and global competitiveness, while using LNG to meet present industrial demands.

The facts

Morocco has unveiled a thorough plan for LNG imports. This strategy, which comes after earlier energy plans came to a standstill, highlights the country’s increasing emphasis on energy security, which is being pushed by changes in the energy environment of North Africa. The new plan calls for collaborations with foreign suppliers and the building of import facilities.

Algerian Pipeline Disruption

Morocco has made a significant shift towards LNG in reaction to Algeria’s decision in 2021 to stop supplying gas to Spain via the Maghreb-Europe Gas Pipeline. Due to the unintentional disruption of Morocco’s gas supply, the nation had to find a creative temporary workaround by using the same pipeline to import natural gas from Spain.

Major Projects and Partnerships

Important infrastructure projects include Shell’s 12-year LNG supply agreement with Morocco and the Nador West Med terminal, a floating LNG terminal with an annual capacity of 0.5 billion cubic meters (bcm). With the terminal’s integration with the current Maghreb-Europe Gas Pipeline, Morocco may be able to export LNG to Spain again in the future.

Expansion into Western Sahara

Apart from the Nador terminal, a very contentious LNG import plant is being suggested in the Western Sahara, close to Dakhla. Due to geopolitical sensitivities, this area, which is linked to the proposed Nigeria-Morocco Gas Pipeline, may encounter opposition from other countries.