In the midst of the energy crisis and the spiral of rising energy prices, Algeria’s decision to close the largest of the gas pipelines that supplied gas to Spain has caused a reversal in the structure of the country’s imports. The closure of the underwater tube of the Strait, at the end of October, has forced Spain to shoot the weight of gas purchases arriving by boat and it has ended up disrupting the ranking of supplier countries.
Algeria has lost its historic position as the largest gas supplier and has been ousted by the United States. According to the latest data published by Enagás, the operator of the Spanish gas system, Last month the US concentrated 34.6% of imports of the country, (with 13,103 gigawatt hours, GWh), while Algeria reduced its weight to 25.4% of the total gas received (with 9,620 GWh)
Algeria shut down on October 31 Maghreb-Europe gas pipeline, which connects with Spain through Morocco, as a result of the diplomatic clash between Algiers and Rabat on behalf of Western Sahara. Since then, the distances between Algerian and American gas sales had been narrowing to almost equal, but in January there has been a clear ‘sorpasso’ that remains to be seen if it will be only conjunctural or it ends up settling.
Algeria has traditionally been the main gas exporting country for Spain. It has been so in recent years and it was also so last year as a whole, with almost 43% of the total, compared to just 14% coming from the United States, according to the combined records of Enagás and the Corporación de Reservas Estratégicas (Cores). During 2020, with demand and trade conditioned by the economic break at the start of the pandemic, there were several months in which Algeria ceased to be the first supplier superseded by the United States and Qatar.
On the other hand, the concern of the sector and the Government about the impact of the military tension on the Russia and Ukraine it is not so much because of possible problems of security of supply, but because of the possible impact it can have on the price of natural gas in international markets. Russia concentrated 8.9% of Spanish gas imports last year, ranking as the fourth largest exporter behind Algeria, the United States and also Nigeria. In January, the weight of Russian gas in January fell to 5.8% of total Spanish imports. The gas sector stresses that it could easily supply Russian gas with purchases from other supplier countries.
70% of the gas arrives by boat
Since the closure of the largest of the gas pipelines that connect with Algeria, three months ago, gas imports from Spain were distributed almost equally between those arriving through pipelines and those received by boat. But that balance has been broken and the balance has become unbalanced in favor of the arrival of methane tankers to the Spanish regasification plants.
Already in November, the first month without one of the two gas pipelines with Algeria, imports per boat accounted for 65% of the total. And in December and January, the weight of the methane tankers has ended up climbing to almost 69% of all purchases, according to data from Enagás and Cores.
In the whole of 2021, Spain imported a total of 415,569 GWh gas equivalent, 13.8% more than in the previous year, in which the economic break due to the pandemic caused a fall in demand. Throughout the year, 45.5% arrived by pipeline from Algeria and 54.5% came by ship in the form of liquefied natural gas (LNG) to the six Spanish plants in which it can be regasified.
Armor with more ships
Spain has taken steps in recent months to bolster gas supply in winter to cushion the effect of the closure of the largest gas pipeline with Algeria and with rising tension between Russia and western powers over Ukraine threatening to further hit an already stressed gas market.
Spain already activated before the closure of the gas pipeline a shock plan to trigger the number of ships that will bring gas to the country and has not stopped reinforcing it to shield the supply. Enagás has been celebrating extraordinary slots auctions to increase the discharge capacity in the country’s regasification plants.
Enagás has already awarded already 54 additional slots for gas companies to increase the supply by ship after the new auctions of the last weeks. For the winter period-between November and March-the company has awarded a total of 145 download slots in the country’s six regasification plants, a figure far higher than the 86 ships that arrived last winter.