11 Oct 2017 19:05

Novatek expects Morocco to decide on LNG suppliers in 3-4 months

RABAT. Oct 11 (Interfax) - Novatek is interested in supplying liquefied natural gas to Morocco and is waiting for the country to say when it needs the LNG and in what volumes, the Russian company's CEO, Leonid Mikhelson, told reporters during the visit by Russian Prime Minister Dmitry Medvedev to Morocco,

"Logically, what we see, what we know about the timing of existing contracts - logically, they'll need to be reaching some sort of decision in the next three or four months," he said.

Morocco intends to hold a tender to find an investor for a regasification terminal, Mikhelson said.

Morocco is planning to deliver an integrated gas to power project to meet its growing demand for electricity. The project involves building a re-gasification terminal, a 400-km gas pipeline and 2,400 MW gas-fired power plant at a overall cost of $4.6 billion.

Morocco currently has a 385 MW power plant, fired by gas it receives from Algeria under a long-term deal with Sonatrach, and as a royalty for transit of gas via the Maghreb-Europe Gas (MEG) pipeline, which carries gas from Algeria to Spain and Portugal. Both agreements lapse in 2021.

The Moroccan Energy Ministry forecasts the power industry's demand for gas will rise from around 1 bcm today to 3.5 bcm a year in 2025.

It will cost an estimated $600 million and take three years to build an LNG terminal at the port of Jorf Lasfar, and it will cost $800 million and take four years to build a regasification terminal, capacity 5 bcm of gas or 3.6 million tonnes LNG per year.

The gas pipeline that will link the terminal with the MEG and also deliver gas to the new power plant will cost $600 million. One 1,200 MW plant might be built at Lasfar and another 1,200 MW plant at Dhar Doum at a combined cost of $2.2 billion.

Morocco has received 93 expressions of interest in its international tender for the project. A contract will be signed with the winner to supply between 3 bcm and 5 bcm of gas over a period, according to Interfax's information, of 20 years, as well as an agreement to buy electricity. The power plants would receive 3.5 bcm of gas and Moroccan industry would receive 1.5 bcm.

Morocco has already held talks with the United States, Qatar and Russia regarding gas supplies.