MADRID – Spanish Prime Minister Pedro Sánchez has in recent weeks embarked on a diplomatic campaign. The aim of this is to strengthen political and commercial ties with key oil and gas producers.
The Spanish government had previously strengthened ties with oil and gas producers Qatar and Nigeria. This was part of the EU’s search for alternatives to Russia. The Atlantic Alliance meeting in Madrid at the end of June demonstrated the good relationship with Washington. Consequently, this has resulted in a sharp increase in Spain’s imports of liquefied natural gas. In March, the EU and Washington signed an agreement to ship an additional 15 billion cubic metres of liquefied natural gas to member states from April this year. Spain has good relations with its main supplier of natural gas. However, this could be boosted by the migration agreement being negotiated between Madrid and Washington. It proposes that some of the migrants from Central America arriving in the United States be received in Spain.
In search of oil and gas
Since the beginning of the Russian attack on Ukraine, Spain, like all EU Member States, has been busy looking for new oil and gas suppliers and securing current ones. America has traditionally been the third largest importer of natural gas to Spain after Algeria and Nigeria. But in recent months American gas imports have even surpassed those from Algeria.
In 2021, Spain imported 59,815 cubic centimetres of liquefied natural gas. This arrives in liquid form in methane tankers rather than through pipelines. According to the latest Enagás report, the US became Spain´s main exporter of natural gas in February of this year. Natural gas of US origin (12,472 GigaWatt hours) accounted for 32.9% of total Spanish imports. Meanwhile, Algeria came in second with 8801 GigaWatt hours 23.2%.
Although the nature of its relations with the United States is hardly comparable to that of other countries, Spain also has good relations and cooperation agreements with, for example, Qatar and Nigeria. At a time when all countries are in turmoil, many are looking to alternative suppliers. Italy, for example, wants to increase gas supplies from Algeria. And Austria is offsetting sanctions on Russian oil with crude from Norway. Spain too is trying to secure supplies of energy commodities, especially gas, with visits from the emir of Qatar and the president of Nigeria.
It stated, ‘foreign relations are not built ad hoc, but over time’. It added that just as the pandemic has crippled visits and contacts, the need to break the energy cordon with Russia has underlined the need for the government to take ‘certain steps’ to strengthen relations with other countries.
Consequently, a fortnight ago the government and the Royal House visited the emir of Qatar, Tamim bin Hamad Al Thani. This was to initiate a ‘strategic relationship’. Moreover, this is the status the emirate accords to a small group of countries to which it wants to sell the 33 million tonnes of natural gas it plans to put on the market between now and 2024.
In addition to the agreements on immigration and justice, and the fact that Nigeria was the main African destination for Spain for its donations of Covid vaccines, the visit of the Nigerian president to Madrid a few days ago also involved Zarzuela and King Felipe VI. This led to a commitment to ‘strengthen the energy supply’ from this African country. Importantly, this is currently the main source of oil reaching Spain. It delivered 19.8% of the total in 2021, and was the third for natural gas.
Algeria is missing
Amidst these movements, relations with Algeria also continue with no current political developments. However, there has been a drop in natural gas exports. Furthermore, it has been three months since Algeria recalled its ambassador for consultations in protest at the agreement with Morocco on Western Sahara. Also, the Foreign Ministry has no news yet on when he will return to Madrid. Meanwhile, statistics from CORES (Corporation of Strategic Reserves of Petroleum Products) of the Ministry of Ecological Transition and from Enagás show that the amount of gas brought in from the North African country has fallen. Between January and April 2021, it was the equivalent of 60,415 gigawatts per hour, and between the same months this year, 37,137.
Negotiations between Algerian state energy company Sonatrach and its Spanish partner Naturgy on the revision of the gas purchase contract have not yet been completed, a process that all parties involved, including the Spanish government, assume will lead to a price increase due to the international context.