Shell has signed a 12-year agreement to supply liquefied natural gas (LNG) to Morocco, reported Reuters, citing the North African country’s energy ministry.

Under the deal, Shell International Trading Middle East will supply 0.5 billion cubic metres (bcm) of LNG to Morocco’s electricity and water utility ONEE, reported LNG Prime.

Financial terms of the transaction were undisclosed.

Shell plans to transport the gas from Spanish ports initially, using the Maghreb-Europe gas pipeline that links the two countries, until the completion of Morocco’s own LNG terminals.

ONEE will use the LNG to support the operation of its two power stations in northern and eastern Morocco. The two power stations used to operate on gas supplied by Algeria through the same pipeline.

However, in 2021, Algeria unilaterally decided to halt gas supply to Spain via Morocco through the Maghreb-Europe pipeline, reported Reuters.

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By GlobalData

ONEE intends to increase the gas share in Morocco’s electricity mix to meet low-carbon goals, reported the news agency, citing the ministry.

ONEE head Abderrahim El Hafidi was cited by the North Africa Post as saying: “This agreement will enable us to meet part of our needs and guarantee the supply of natural gas to our power stations. Natural gas is now a major component of our electricity mix because it offers the flexibility needed to offset the massive introduction of renewable energies into our electricity system.”

The latest agreement is expected to help Morocco boost its energy security, improve competitiveness and fast-track implementation of the national decarbonisation strategy.

Recently, Reuters reported that Shell discovered hydrocarbons in an exploration well offshore Namibia following the successful drilling of its fourth exploratory well, Lesedi-1X.