Morocco has put plans for a new natural gas pipeline on hold after its finance ministry blocked the tender over budgetary and regulatory concerns.
The decision has delayed a project intended to support gas imports and ease the country’s move away from coal fired power.
In an internal document issued on Tuesday, the finance ministry opposed the pipeline tender launched by the energy ministry last month.
The document showed the ministry raised objections linked to procedural breaches, fiscal exposure and uncertainty surrounding a proposed gas law.
The energy ministry announced on Monday that it was suspending the invitation for bids, citing “new parameters and assumptions” without further explanation.
The finance ministry stated in the document that it “reiterates its commitment to continue supporting this project” and remains prepared to resume the evaluation process once required conditions are fulfilled.
It added that the suspension was based on the opinion of the commission responsible for approving public private partnership projects.
The tender was issued as part of Morocco’s broader plan to diversify its energy mix and reduce dependence on coal. However, concerns within the finance ministry brought the process to a standstill only weeks after it was launched.
Why the pipeline tender was suspended
The finance ministry explained that the tender had been launched without its prior approval of the project’s eligibility as a public private partnership.
It also pointed to uncertainty over which public institution would oversee the project during construction and operation.
In addition, the document referred to worries about the project’s “budget sustainability” and what it described as an unbalanced sharing of risks between the public authority and the private operator.
It noted that the project lacked a clearly defined target scenario for structuring the partnership.
The tender had set a deadline for the opening of bids. Hence, the suspension came before any offers were reviewed.
Rachid Ennasiri, a director at independent climate think tank IMAL, said the decision could help manage exposure in a volatile energy market.
“Putting this pipeline on hold may prove a prudent risk management decision in a context of volatile fossil fuel prices and shifting gas markets,” he said.
He added that energy systems in many countries are adjusting to price swings and supply risks by accelerating renewables and storage.
“Across many power systems, governments are responding to prices and security risks by accelerating the deployment of renewables, storage and grid flexibility, and avoiding long term gas lock in,” Ennasiri said.
How the pipeline fits into Morocco’s energy plans
The proposed project was structured as a public private partnership and aimed to link a future gas terminal at the Mediterranean port of Nador West Med to an existing pipeline. That pipeline currently allows Morocco to import liquefied natural gas through Spanish terminals.
Apart from the northern link, the tender also covered a section extending the pipeline to industrial zones in Mohammedia and Kenitra along the Atlantic coast. The infrastructure was designed to support industrial gas demand and power generation.
Morocco has been expanding gas use as it seeks to cut coal’s share in electricity production while scaling up renewable capacity. The country targets renewables to account for 52% of installed power capacity by 2030, compared with about 45% at present.
In 2024, coal generated around 60% of Morocco’s electricity output, while natural gas accounted for roughly 10%. Wind and solar together contributed about 25%, based on data from the National Electricity Regulatory Authority, ANRE.
Gas demand in Morocco is expected to rise to about eight billion cubic metres by 2027 from around one billion cubic metres currently, based on ministry estimates.
Meanwhile, the country continues to rely largely on gas imports routed through Spain using a pipeline that previously transported Algerian supplies.
