Morocco.. 12-year gas supply agreement with Shell

Morocco's energy ministry announced on Friday that Shell will supply 500 million cubic meters of liquefied natural gas (LNG) annually to the kingdom under a 12-year agreement.

The ministry said in a statement that the National Office of Electricity and Potable Water signed the agreement with Shell, without disclosing the financial terms of the deal.

The gas will be shipped in the early years from Spanish ports using a gas pipeline linking the two countries until Morocco builds liquefied natural gas terminals, the ministry said.

The agreement is the first medium-term purchase contract for LNG on the international market by Morocco's National Office of Electricity and Potable Water (ONEE).

The ONEE aims to increase the share of gas in Morocco's electricity mix to meet carbon emission reduction targets, the ministry said.

Leila Benali @LeilaRBenali, Minister of Energy Transition and Sustainable Development, chaired today in Marrakech the signing ceremony of a medium-term LNG contract between the National Office of Electricity and Potable Water (ONEE) and Shell @Shell, pic.twitter.com/sZbnZ92f7y

— MTEDD Ministry of Energy Transition and Sustainable Development (@MTEDDMAROC) July 14, 2023

Official figures showed that renewables accounted for 18 percent of Morocco's total electricity production last year, while gas accounted for only 1.6 percent and coal 72 percent.

By March 2023, renewable energy accounted for 40 percent of the country's existing capacity, and Morocco plans to increase this to 52 percent by 2030.

LNG will help the National Office of Electricity and Water (ONEE) power two power plants in northern and eastern Morocco.

Morocco is accelerating its energy needs, especially since it imports 96% of its consumption through external sources, in conjunction with the rise in prices resulting from the outbreak of the Russian-Ukrainian war.

Morocco is investing more in renewable energies and forging partnerships within the framework of green hydrogen, as the country is among the top 5 producers of solar energy among Arab countries.