Morocco to start downstream division for domestic oil and gas projects

Morocco is close to setting up a downstream division of state-owned ONHYM to manage domestic natural gas infrastructure, including a project to deliver gas by pipeline from Nigeria to Morocco through 13 countries, a source at ONHYM told S&P Global Platts Nov. 11.

"It's on the way," the source, who asked not to be identified, said. "It's a new entity created to take care of the downstream business."

ONHYM is in charge of the pipeline known as MNGP to take gas from Nigeria, which holds Africa's largest gas reserves, to Morocco and then to the European market.

Morocco is also building networks to distribute gas to industry hubs where automobile and aeronautics industries are expanding, the person said.

"The industrial sector in Morocco is growing fast and gas will be an important part of this growth," the source said, and declined to comment on what Morocco plans to do to replace lost gas from Algeria.

Spain's largest gas group Naturgy said Nov. 10 that it remained in talks with parties in Morocco and Algeria to potentially achieve an extension of the gas transit agreement for supplies of Algerian gas in the GME pipeline via Morocco to Spain.

Gas deliveries through the GME pipeline fell to zero Nov. 1 after the long-term transit deal between Algeria and Morocco was not renewed ahead of its expiry Oct. 31.

Morocco has estimated its resources at some 300 Tcf of conventional and unconventional gas in place and is seeking investors to explore and develop these resources. Rabat has received "a lot of interest" for its proposed floating storage regasification unit off the Atlantic coast, the ONHYM source said. A project to deliver electricity generated from solar and wind to the UK is also under evaluation, the person said.

Morocco needs a big discovery offshore to attract more companies to explore the country, the source said.