Algeria Regains Spot as Spain's Top Natural Gas Source

Algeria regained its place as Spain's main supplier of natural gas in January, providing a quarter of monthly demand, gas grid operator Enagas said on Thursday. While the North African country had accounted for the largest volumes of monthly gas shipments to Spain since Enagas records started in 2006, it fell to second place behind the United States in January 2022 following diplomatic spats with both Spain and Morocco.

The former Maghreb-Europe pipeline was shuttered in the fourth quarter of 2021 after clashes between Algiers and Rabat, while diplomatic tensions with Madrid flared when the Spanish government changed its position on Western Sahara, leading Algeria's Sonatrach to revise gas prices.

Sonatrach and Spanish power group Naturgy (NTGY.MC) established a new price retroactively applicable for volumes supplied to the end of 2022 and also agreed to continue negotiating prices this year. Algeria has said it will stick to contractual obligations to supply gas to Spain despite withdrawing its ambassador to Madrid in June 2022 over the Western Sahara, where Algeria backs an independence movement.

Enagas said 25%, or 8,545 GWh, of total gas deliveries to Spain in January of this year came from Algeria. Both countries are linked through the 757-kilometre (470-mile) submarine Medgaz pipeline. The United States and Nigeria followed on the list of Spain's top suppliers at 20.7% and 20.2%, respectively, with all volumes shipped as liquefied natural gas. Deliveries from Russia tripled year-on-year to 6,372 gigawatt hour (GWh) from 2,178 GWh. It was the highest volume since June, when Spain sourced 8,752 GWh from Russia.