Energy Newsletter - August 2025

Natural Gas

In terms of imports, Algeria reduced its supply volume in July, falling from 12,000 GWh in June to 10,211 GWh. Despite this reduction, Algeria remains the leading supplier to our country, although its lead over the US narrowed in July, with the US rising to almost 6,400 GWh. This marks the end of the two-month period (April and May) during which American gas surpassed that from Algeria. Although this is a relatively unusual circumstance, it has occurred multiple times since 2020, particularly throughout 2022 and several months of 2023. While Algeria exported 2.5 times more gas to Spain than the US in 2024, the volume of gas imported from both countries is very close so far this year (71,778 GWh from Algeria compared to 65,690 GWh from the US).

Russia's position also stands out, with its steady decline seemingly offset by Angola and Nigeria, both of which are clearly on an upward trend. In terms of market share, Algeria continues to lead with 33% (within its usual range of 30–45%), surpassing the US with 21%. Meanwhile, Russia, with its lowest share in the last 12 months, is in third place with 7%, behind Angola and Nigeria, both with 13%.

Finally, the year-on-year calculation shows that Algeria's fluctuation is not too pronounced. With growth of 19% compared to July last year, Algerian supply has remained relatively constant over the last twelve months compared to last year's figures, with a single peak of +44% in November. Therefore, it seems that turbulent diplomatic relations with our country did not affect gas supply.

In terms of exports, Morocco has once again reached its highest level in the last 12 months (992 GWh), thus maintaining the upward trend that began in December of last year. While it has surpassed France by a large margin over the past two months, Morocco has only received via Spain half of what Spain exported to France so far in 2025, primarily due to strong demand from France in February and April. Overall, gas exports from Spain remain at moderate levels, with none of the four countries exceeding an average of 1,500 GWh per month.

While France is usually our largest recipient in total, Morocco has regained the lead in percentage terms (36%), having held that position for five consecutive months last year (August to December).

It also has the most consistent demand of the four main importers. Thus, compared to the large year-on-year variations experienced by French, Italian and Portuguese demand to a lesser extent, Morocco's demand remains within its usual range of +/- 50%. Indeed, Spain's extensive regasification infrastructure enables Morocco to purchase LNG from international markets and receive it from our country via the Maghreb-Europe gas pipeline. This is in the opposite direction to the original pipeline, whose contract was terminated by Algeria in 2022. The maximum capacity of this pipeline is around 32 GWh (according to MITECO), and it is certified to guarantee that the LNG does not originate from Algeria.

Crude Oil

Both Libya and Algeria have become major suppliers of crude oil to Spain, which imports 25 types of crude oil from 16 countries. In June, Libya experienced a sharp decline of 240 kt, reversing the upward trend it had maintained since the beginning of the year and even reaching parity with the United States — now the main supplier — in May. Meanwhile, Algeria, having experienced significant growth between February and March, appears to have reached the 300–500 kt range, surpassing Libya for the second time in twelve months and even Nigeria, the leading supplier a year ago, which has suffered a year-on-year decline of 68%.

Despite the sharp fluctuations experienced by each country throughout the year, the respective quotas do not vary greatly, particularly among the main suppliers. Notably, Algeria has exceeded its initial range of 2–5% and jumped to 6–9% in the last four months. Libya has remained more stable throughout the year, with an average share of 7% of Spain's crude oil imports, which is still far from the average shares of the US and Brazil (15%) and Mexico (13%). In any case, unlike the highly concentrated gas market, where six countries account for 90% of the market, nine countries account for only 80% of the crude oil market. This means that each country has less capacity to affect Spain's overall supply.

Electricity

Analysis of cross-border electricity exchanges over the last twelve months (excluding Andorra) reveals quite different situations in the electricity demand. Portugal consistently has a negative balance (more exports than imports), with its lines following an almost inverse or 'mirror' trajectory: when the former rise, the latter fall, and vice versa. In May, Portugal regained its position as the top destination for our electricity exports, with demand now greater than that of the other two countries combined.

Morocco continues to show a consistently negative balance (more exports than imports), except in December when imports slightly exceeded exports to the North African country. While both lines show a relative mirror effect, exports have increased over the last four months, with imports remaining below 10,000 GWh (just 1,500 GWh in May). This has resulted in a negative balance of over 430,000 GWh in July.

News

• 24 July 2025: Algeria signs five contracts worth $600 million for hydrocarbon exploration. The companies involved are the Swiss-Austrian consortium Filada and Zangas (Toual 2 block, Berkine basin); China Sinopec (exploration and development of the Qarn El Qissa 2 block); Eni and PTTEP (Reggane 2 block); ZPEC (Zarafa 2 block); and Qatar Energy in partnership with TotalEnergies (exploitation of the Ahara field).
• 26 July 2025: Libya signs agreements with US energy companies. Masad Boulos, the US presidential advisor for Africa, announced that the National Oil Corporation (NOC) of Libya is moving forward with the signing of two agreements with ExxonMobil and ConocoPhillips. The first agreement is for the study of potential offshore gas reserves in the northwest and Sirte basins, while the second will see production increased at the Waha oil fields. Boulos himself attended the signing ceremony for a $235 million infrastructure agreement between NOC and Hill International.
• 31 July 2025: Libya and Japan are strengthening their energy cooperation. The Libyan Minister of Oil and Gas (GNU of Tripoli) met with the Japanese ambassador to strengthen bilateral cooperation in the energy sector, particularly with regard to gas and oil pipeline development, executive training, exploration, and energy modernisation. They also expressed their intention to attract Japanese companies to Libya.
• 18 August 2025: ACWA Power wins two solar projects in Morocco. The Saudi company won the tender launched by the Moroccan Agency for Sustainable Energy (MASEN) to build the NOOR Midelt 2 and 3 solar plants, each with a capacity of 400 MWp. The plants will be accompanied by battery storage systems with the capacity to supply 230 MW for two hours. The projects will be developed under a Build-Own-Operate (BOO) model with 30-year power purchase agreements.
• 18 August 2025: Progress on the Morocco–Nigeria gas pipeline. A delegation from the Moroccan National Office of Hydrocarbons and Mines (ONHYM) attended the US-Africa Energy Forum in Houston, aiming to persuade US investors to contribute to the development of the ambitious gas pipeline project between Morocco and Nigeria. The ultimate goal of this project is to transport African gas to Europe.
• 21 August 2025: Algeria inaugurates new gas complex. The Minister of Energy and the CEO of Sonatrach launched a new gas treatment complex in Aïn Tsila, Illizi, with the capacity to process 12 million cubic metres of gas per day, as well as 1,800 tonnes of condensates and 1,600 tonnes of LPG per day. The complex also includes a 125 MW power plant and a 335 km pipeline network. (Source: Sonatrach).