On Dec. 16 in Rabat, Minister of Energy and Mining Abdelkader Amara presented his domestic gas plan. The plan, which has a total budget of $4.6 billion (a little over 40 billion dirhams), calls for the massive importation of liquefied natural gas (LNG) to Morocco to reduce the kingdom's dependence on other energy sources and diversify its methods of electricity production.
What is liquefied natural gas?
Natural gas is one of the cleanest energy resources available, even though burning it produces carbon dioxide. Natural gas is primarily used for heat (heaters, ovens) and electricity. In 2010, it ranked third in the global energy mix and accounted for 22% of global energy supply, according to the oil company Total. The largest producer of natural gas is the United States. Algeria is the 10th largest producer of this energy source, according to the CIA World Factbook.
LNG is natural gas cooled to -160 degrees Celsius (-256 degrees Fahrenheit). This cooling reduces its volume and transforms it, as the name suggests, into a liquid. Reducing the volume of natural gas makes it easy to transport.
Why make a gas plan now?
One of the main objectives of the Moroccan gas plan is to “meet the domestic electricity demand,” according to Amara. The demand for electricity is expected to rise by 6.1% annually between 2014 and 2016, and the gas plan aims to respond to this demand.
Another objective is to reduce Moroccan energy dependence. The Moroccan energy balance is negative, particularly due to imported oil, which represents almost 61% of energy consumption of the kingdom. LNG will represent 13% of the energy mix by 2025.
Another factor Amara takes into account is the November 2021 expiration of the transit agreement of Algerian gas through the Maghreb-Europe pipeline.
What are the main steps?
The gas plan will start being implemented in January 2015. From that date, the government will contact the main LNG suppliers to sign contracts. These contracts will represent a volume of 3 to 5 billion cubic meters of gas.
At the legislative level, a “gas code” will be written by Amara’s department and submitted to the legislative branch by June 2015 if all goes well. Between September and November 2015, an agreement will be made between the state, the National Board for Electricity and Drinking Water (ONEE) and select Moroccan partners to set the components of the project. ONEE will create a tender for the transformation of natural gas into energy.
All this should make the first gas-powered power plants operational by 2021, according to the minister’s projections.
What is the cost?
Amara estimates the investments necessary for the implementation of the gas plan at $4.6 billion. Morocco is counting on private investors as well as national and international institutions to cooperate with ONEE to provide financing for the project. Concession contracts are planned, which means that the infrastructure will be used by investors.
The necessary infrastructure will require a budget of 2.4 billion dirhams ($267 million). A gas terminal will be built in Jorf Lasfar and its construction will cost $800 million. Another $600 million will be needed to build a marine jetty capable of accommodating vessels transporting LNG. Another $400 million will be devoted to the construction of storage space. Finally, the construction of a pipeline to transport the gas requires an investment of $400 million. The pipeline will be about 400 kilometers (250 miles) long and pass through Mohammedia and Kenitra. The remaining 2.2 billion dirhams ($245 million) will be spent on building ONEE power plants.
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