Morocco is the only North African country with no hydrocarbon reserves, depending on foreign exports for 90% of its energy needs. Now the country is planning to unburden itself from an overreliance on historic suppliers like Algeria and Spain with a series of shale gas and LNG projects, as well as plans for developing renewables (especially solar power). These initiatives are partly aimed at coping with the rapid growth of energy demand in Morocco, which will reach 65 TW/h within 10 years, with a 6.2% increase between 2017 and 2025: "The Kingdom’s goal is to move from being a coal-dependent importer to a market in which clean energies and natural gas play an increasing role," explains Riccardo Fabiani, senior analyst at Eurasia Group. "On one hand, Morocco hopes to lower import costs, especially from Algeria, with which it has a troubled relationship. On the other, the government is aiming for greater energy efficiency and the possibility of exporting renewables to Europe." However, Rabat’s green ambitions appear to make the exception in North Africa. "The trouble is," continues Fabiani, "that even though Libya, Algeria and, to a lesser extent, Tunisia, have a wealth of natural resources, these nations are plagued by political and financial instability that affect the entire region. Overly vague development plans make foreign investors and companies nervous about the energy market."
A New LNG Terminal
Morocco’s LNG National Development Plan was approved in late 2014. One of the most important projects foreseen by the plan is the construction of the Jorf Lasfar onshore LNG terminal, near the city of El Jadida. The site will house storage facilities for at least 5 billion cubic meters of LNG per year, a specially fitted marine jetty, regasification plants and new high pressure gas transmission pipes. Jorf Lasfar will be connected to the Maghreb-Europe Gas Pipeline by a 400 km pipeline. The construction of these facilities will yield a profit over time:"The LNG market is expanding," Fabiani adds, "and the Moroccan government is perfectly aware of the fact that it cannot transition to a purely renewable model in just 10-20 years. For the moment, natural gas is the best solution for the country, and Morocco is a very attractive market for foreign investors. It won’t be difficult for the country to find the necessary resources and knowhow to implement the project." The project is being funded by a public-private partnership (PPP) investment exceeding $4 billion, made possible in part thanks to a recent deal with Qatar, one of the world’s leading natural gas producers, dominating the global market alongside Russia and the USA. In order to affirm greater autonomy and negotiate supply contracts more effectively, the North African country has diversified its trade relations and is planning to draft a "gas code" to regulate the market. The plan will also involve the cities of Safi and Tangier, through which Russia could distribute natural gas to countries like Chad, Senegal and Niger.
Shale Gas Exploration
During the last few years, Morocco has also been making efforts to develop shale gas production, following the discovery of modest reserves in Lalla Mimouna and the Sidi Moussa Block, southwest of Agadir. But the results in this sector have been less than satisfactory: "The future of natural gas and hydrocarbons in Morocco is rather uncertain," states Stephane Foucaud, an analyst at FirstEnergy Institutional Research. "The discoveries, especially offshore, have been modest. Large gas & oil companies like the Irish Circle Oil, Gulfsands and San Leon (which is investing in Nigeria) are reconsidering their strategies. Shale gas exploration requires a lot of time and capital and the established presence of a developed industry, something which Morocco is lacking." However, the company Sound Energy has stated that it is enthusiastic about very recently discovered shale gas deposits in the onshore Tendrara basin, which are proving larger than expected: "We’re looking at 17 mcf/day," announced a delighted James Parsons, the company’s CEO. "I believe Tendrara, Meridja and the Eastern Morocco TAGI have the potential to be a material hydrocarbon province on a global scale."
The Solar Boom
As mentioned already, it’s about more than shale gas and LNG. Morocco has embarked on the path to renewable energy production, developing in particular its solar capacity. According to IRENA, the country is becoming a leader in the sector. Just consider Ouarzazate, in the Sahara Desert, which in 2018 will become the largest solar field in the world, supplying 580 MW of electricity to over one million people, or the three thousand villages across Morocco that are already receiving power from small-scale solar panel installations.