Sound Energy, Morocco-focused upstream gas company, has announced the signature of a binding 10 year LNG sales agreement for the Phase 1 development covering the sale of around 100 million cu/m of gas in a liquified form per year
The company has provided this update in relation to the micro liquified natural gas ('mLNG') phase 1 development plan for the TE-5 Horst development (the Phase 1 Development) at the Tendrara Production Concession, onshore Morocco.
Graham Lyon, Sound Energy's executive chairman, commented, “This is a key milestone in moving forward towards the final investment decision and notice to proceed for the Tendrara Phase 1 Development.
In recognition of the alignment between Sound Energy and Afriquia Gaz, I am also pleased that we announce today that the parties are working towards improved terms in relation to the Afriquia Gaz loan note upon which the LNG sale and purchase agreement is, inter alia, conditional. We plan to conclude this loan note ahead of finalising the contract to construct the plant.”
The company has further announced that Sound Energy Morocco East Limited (SEMEL), its wholly-owned subsidiary, has entered into a binding and fully termed conditional LNG sale and purchase agreement with Afriquia Gaz, pursuant to which SEMEL will sell not less than 171,000 cubic metres of LNG per year (approximately 100 million cu/m a year of gas to be produced and liquefied from the Phase 1 Development) on behalf of the Concession joint venture (the LNG SPA).
Under the LNG SPA, SEMEL will commit, for 360 days of each year over a period of 10 years from first gas, to provide to Afriquia a daily quantity of between 475 and 546 cubic metres of LNG, and Afriquia will commit to an annual minimum 'Take or Pay' quantity of 475 cubic metres per day of LNG.
