Petroleum Africa
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Wednesday, December 11, 2024
Release
Morocco’s and Africa’s future energy needs depend on significant long-term investment in low-carbon energy sources, with gas playing a key role. To address this national priority, Managem is establishing an industrial natural gas division and announces the acquisition of Sound Energy Morocco East Limited (SEME) following a competitive process involving international investors.
The assets covered by the agreement include:
Imad Toumi, Chairman and CEO of Managem, declared: “Sound Energy Plc chose Managem through a competitive process seeking an investor to finance the project’s development and has found in Managem a reliable long-term partner with the capability to successfully develop and complete the project. This transaction will allow all Moroccan manufacturers to access cleaner and more affordable energy for their industrial operations. Although modest in size, the Tendrara project will positively impact Morocco’s energy independence and trade balance. In addition, the Group is actively exploring other natural gas opportunities across Africa, thereby reinforcing its diversification strategy and contributing to the continent’s energy development.”
The gas development plan for the Tendrara project is structured in two phases:
Phase 1: Currently under construction, this phase aims to produce 100 million cubic meters per year of Liquefied Natural Gas (LNG) from mid-2025. It involves setting up a processing, liquefaction, and gas storage facility to serve the needs of national manufacturers.
Phase 2: Currently under feasibility study, this phase plans for the construction of a processing facility and a pipeline that will connect to the Maghreb-Europe Gas Pipeline (GME). The goal is to supply 280 million cubic meters of natural gas per year, thereby enhancing the Kingdom’s gas supply.
The terms of the agreement provide for an amount of approximately $12 million (approximately MAD119 million), payable upon completion, in addition to funding of up to $24.5 million (approximately MAD244 million) of Sound Energy’s share of financing in the implementation of Phase 2 of the project.
The overall agreement is subject to the fulfilment of specific Conditions Precedents, which include obtaining necessary regulatory approvals.
With this acquisition, Managem expands its activities into the upstream exploitation of natural gas in Morocco and reaffirms its ambition to become a regional player in the development and exploitation of natural resources with low carbon emissions.
Located in the Eastern Province of Morocco, the gas assets portfolio covers an area of approximately 23,000 sq km. The Tendrara concession includes a 133.5 km² operating license, granted for a period of 25 years from 2018, with estimated reserves of 10.67 billion cubic meters of natural gas.
Upon completion of the transaction, the Tendrara project will be 55% owned by the Managem Group, 20% by Sound Energy Meridja Ltd, and 25% by ONHYM.
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