Shell has signed a new agreement to supply Morocco six billion cubic metres of liquefied natural gas (LNG) over 12 years.

In a statement, Morocco’s energy ministry said that the deal was signed by representatives of Shell and Morocco’s national electricity authority ONEE.

Under the terms of the agreement, the energy major will deliver 500 million cubic metres of LNG annually.

The financial details of the transaction were not divulged.

Initially, LPG will be exported via the Maghreb-Europe Gas Pipeline (GME) from Spanish ports to Morocco, and subsequently through planned Moroccan LNG terminals.

The deal will help Morocco to diversify its energy sources. According to a Reuters report, ONEE will use the LNG to operate two power stations in northern and eastern Morocco.

Morocco Minister of Energy Transition and Sustainable Development Leila Benali was quoted as saying: “This medium-term supply contract will strengthen the kingdom’s energy security and improve its competitiveness by accelerating the Moroccan decarbonisation strategy.”

The energy ministry further added that the move will help ONEE to increase the proportion of gas in Morocco’s electricity mix and meet sustainability goals.

According to official figures, Morocco generated around 18% of its total electricity production from renewables in 2022. The share of gas and coal were 1.6% and coal 72%, respectively.

In September 2022, Morocco signed a memorandum of understanding (MoU) with Nigeria and the Economic Community of Western African States (ECOWAS) to kick-start a $25bn gas pipeline project between the two countries.

The gas pipeline will deliver gas throughout Western Africa and open a new export route to Europe.