Morocco Ascends as Prime Market for Spanish LNG Amid European Decline

Friday 23 August 2024 - 16:25

In a notable shift in regional energy dynamics, Morocco has emerged as the foremost destination for Spanish liquefied natural gas (LNG) exports. This transformation is underscored by recent data from the Spanish Agency for Strategic Reserves (Cores), which reveals a dramatic surge in Spain's LNG exports to Morocco over the past two years, eclipsing traditional European markets.

The pivot towards Morocco as Spain's primary LNG customer was catalyzed by the reactivation of the Maghreb-Europe Gas Pipeline (GME) in reverse flow in June 2022. Since then, the volume of gas sent to Morocco has skyrocketed, positioning the North African country as a pivotal player in Spain's energy export strategy.

Official statistics illustrate a staggering 155-fold increase in Spain's gas exports to Morocco, while exports to several European countries have significantly diminished. According to the latest figures from Cores, Morocco accounted for 18.5% of Spain's total gas exports in June 2024, a dramatic leap from just 0.1% in June 2022.

Over the past 12 months, Spain has exported 9,338 gigawatt-hours of natural gas to Morocco through the GME pipeline, highlighting the Kingdom’s growing dependence on Spanish LNG. Conversely, Spain’s gas pipeline to Italy, connecting Barcelona to Livorno, saw a sharp decline in its share of exports, dropping from 18.4% in 2023 to a mere 4.4% by June 2024.

Despite this shift, Spain continues to import substantial quantities of gas from Algeria, which constitutes 29.6% of its imports, and from Russia, which accounts for 19%, even amid ongoing supply challenges.

Morocco's strategic move to rely on Spanish LNG imports is largely driven by the country’s efforts to avert an energy crisis. Spain, with its extensive regasification infrastructure, has become a crucial partner for Morocco, facilitating the import and transportation of LNG via pipeline.

This partnership has proven economically beneficial for both nations. Spain's government has previously noted that this arrangement generates nearly two million euros in annual revenue, bolstered by fees for unloading, storage, and transport network usage.

The GME pipeline, with a monthly capacity of 960 gigawatt-hours, has been operating at over 90% capacity for the past two years. In August alone, the pipeline's usage peaked at 958 GWh, underscoring the robust energy trade between the two countries as European demand wanes.

This evolving energy landscape not only reflects Morocco's strategic foresight but also underscores Spain's adaptability in the face of changing market dynamics. As European demand for LNG declines, the strengthening of this bilateral energy relationship offers a glimpse into the future of regional energy cooperation.