Morocco to launch tender for Floating LNG Terminal this summer

Morocco plans to launch a tender this summer to build a floating liquefied natural gas (LNG) terminal at the northeastern Nador West Med port, according to the energy ministry’s head of oil and gas.

Reports indicate that the ministry expects to reach a financial close in 2025, with construction, commissioning, and commercial operations scheduled for 2026. The LNG terminal will be connected to an existing pipeline that currently allows Morocco to import 0.5 billion cubic meters (bcm) of LNG annually from Spanish terminals, enough to power two small electricity production plants.

Liquified gas is expensive due to the special infrastructure required to compress gas into liquid for easy and cheap cargo transport, and the infrastructure needed in the receiving country to regasify it.

Since Morocco lacks the infrastructure to regasify LNG, the country struck a deal with Spain to process the LNG in Spanish facilities and send it back to Morocco through the Maghreb–Europe Gas Pipeline in reverse flow.

With the new flow of gas from Spain, Morocco was able to reopen two of its largest electricity-generating centres in Tahaddart and Ain Beni Mathar.

Additionally, Morocco plans to connect the same pipeline to developing gas fields in its eastern and western regions. Morocco’s natural gas needs are projected to increase to 8 bcm by 2027 from the current 1 bcm, according to ministry estimates. Nador West Med is a deepwater port under construction, expected to have a capacity of 3.5 million containers.

Earlier last month, five Moroccan governmental bodies signed a Memorandum of Understanding (MoU) in Rabat to enhance the country’s LNG infrastructure.

The initiative, called the Sustainable Gas Infrastructure Development Program, outlines several goals, including preparing Morocco for LNG, as well as developing natural gas storage and transportation infrastructure.

In the short term, the plan aims to support gas pipelines connecting domestic gas production basins to consumers, the development of the LNG terminal at the port of Nador West Med and a new gas pipeline to connect the terminal to the Maghreb Europe Gas Pipeline.

This program aims to accelerate the development of renewable energies, advance Morocco’s offerings in new green hydrogen sectors and derivatives, and progress the Atlantic-Africa Gas Pipeline Project.

While turning to LNG has resolved Morocco’s energy security issue, the high cost of gas will impact the country’s trade deficit, as gas and electricity are heavily subsidized commodities. However, the nations the energy minister stated that it is “worth the premium.”

In 2022, Morocco’s gas subsidies reached unprecedented levels, with the state subsidies fund covering 74% of the original price for a unit of gas, amounting to MAD 116 ($12.8).

News.Az