Petroleum Africa
Find us on: 
Thursday, July 29, 2021
Sound Energy released an update in regard to its 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.
Highlights
Graham Lyon, Sound Energy’s Executive Chairman, commented: “We are delighted to announce the signature of a binding 10-year LNG sales agreement for the Phase 1 development covering the sale of not less than 100 million cubic meters of gas in a liquified form per year. In addition, the execution of the previously announced equity subscription agreement and the £2 million equity placing cements the strategic alignment between Sound Energy and Afriquia Gaz. 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 finalizing the contract to construct the plant.
“By establishing clear paths both to market for our gas and to our financing of Phase 1 Development, today’s announcement together with the recently announced Schlumberger Silk Route Service acquisition not only mark critical milestones for the Company but underscore our commitment to Sound Energy Shareholders to deliver upon our objectives and to create value through innovative commercial arrangements.”
The company also 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 meters of LNG per year (approx. 100 million cubic meters 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 meters of LNG, and Afriquia will commit to an annual minimum ‘Take or Pay’ quantity of 475 cubic meters per day of LNG.
Pricing under the LNG SPA will be within a range, the floor price being US $6 per mmBTU and the ceiling price commencing at $8 per mmBTU and increasing during the course of the LNG SPA to $8.346 per mmBTU and will be determined using an indexed formula which applies a combination of the European Title Transfer Facility and United States Henry Hub benchmark indices. The point of sale to Afriquia will be at the Tendrara (TE-5) field location following processing and liquefaction, with Afriquia having responsibility for transportation and delivery to its downstream customers.
The LNG SPA is conditional upon fulfilment of certain conditions precedent. The full release with additional terms can be read here.
" alt="First LNG Realized at the Greater Tortue Ahmeyim Project">
" alt="United Energy Acquires Western Desert Producer APEX">
" alt="Baker Hughes Announces Major Gas Technology Orders for Venture Global LNG">
" alt="ReconAfrica: Naingopo Results Demonstrate a Working Petroleum System">
" alt="Tullow Highlights 2025 Operational Plans in Ghana">
" alt="TotalEnergies to Supply 1.5 TWh to STMicroelectronics in France Over 15 years">
" alt="Rockhopper Reaches Final Settlement with United on Egypt’s Abu Sennan Concession">
" alt="Oil & Gas Crucial for African Growth: AEC Calls for Industry Support to Defend African Market">
