Morocco, Shell Sign LNG Supply Agreement for Next 12 Years

Rabat – The National Electricity and Drinking Water Authority (ONEE) signed a twelve-year liquefied natural gas (LNG) supply agreement with Shell International Trading Middle East Limited FZE.

The agreement, which covers the supply of 0.5 billion cubic meters of LNG per year to Morocco, provides for supply via Spanish ports and the Maghreb-Europe Pipeline in the first few years, followed by delivery via future Moroccan LNG terminals, according to a statement by the Ministry of Energy Transition and Sustainable Development.

The Minister of Energy Transition and Sustainable Development, Leila Benali, quoted in the statement, said on the sidelines of the signing of this agreement that “Morocco has entered the international LNG market for the first time in 2022, thanks to exemplary cooperation and a climate of trust with neighboring countries”, stressing that “this medium-term supply contract will strengthen the Kingdom’s energy security and improve its competitiveness by accelerating Morocco’s decarbonization strategy”.

Morocco is committed to the decarbonization of several sectors, including electricity, and the increase in the share of renewable energies in the national electricity mix is generating a greater need for flexibility and access to competitive, low-carbon fuels such as natural gas, recalled the same source, adding that ONEE has more than 2 GW of gas-fired power plants under development.

ONEE Managing Director Abderrahim El Hafidi noted that “after having made several purchases of LNG on the spot market in 2022, we are delighted today to have signed this agreement, which is ONEE’s first medium-term purchase contract on the international LNG market”.

He underlined that the agreement would “meet part of our needs and guarantee the supply of natural gas to our power plants”, adding that natural gas is now a major component of Morocco’s electricity mix, offering the flexibility needed to “offset the massive introduction of renewable energies into our power system ».

Global Origination Director at Shell LNG Marketing and Trading, Mehdi Chennoufi, said his company was delighted “to be working with ONEE and supplying LNG to the Kingdom, to help meet the country’s gas demand”, stressing that “LNG offers a flexible and reliable energy source and has a crucial role to play in the energy transition”.