MOROCCO AND SOUND ENERGY AGREED DEAL FOR LNG PROJECT

British energy firm Sound Energy announced that its micro-liquefied natural gas (LNG) project at the Tendrara production concession in Morocco will generate its first revenues in early 2024, marking a major milestone for the company.

The London-listed company issued a press release unveiling its audited final results for 2022, emphasizing that phase 1 LNG delivery is planned to start in 2024.

The energy company noted that the main civil work—the LNG tank foundations— was completed and tested in early 2023.

The company’s Executive Chairman, Graham Lyon, highlighted that 2022 was a year of “real tangible progress” for Sound Energy, with the micro-LNG development at Tendrara contracted set to deliver “maiden revenues” in early 2024.

Regarding the second phase of the development of the Moroccan Tendrara project, the energy firm recalled the Maghreb-Europe pipeline interconnection agreement with Morocco’s Hydrocarbons and Mines Office (ONHYM), which took place in March 2022.

As per the agreement, ONHYM approved the connection of the Tendrara Production Concession via a gas export spur pipeline to the Maghreb-Europe pipeline.

The UK’s Sound Energy highlighted that the Grand Tendrara exploration permits’ first “complementary period” has begun, though ministerial approval is still pending.

The company also announced an extension of the Sidi Moktar and Anoual exploration permits for another year, noting that the decision is still subject to ministerial approval.

Sound Energy experienced disruptive events in 2022, such as a tax dispute with Moroccan authorities, which slowed its operations; however, engineering and manufacturing both progressed.

The company has resolved its tax issues, allowing it to optimize its resources for field development. 

“UK’s Sound Energy entered into a settlement agreement with Morocco’s tax authority on a phased payment schedule back ended over 6 years of approximately US$2.5 million as a full and final settlement against a claim of approximately US$23.95 million,” the company noted in its press release.

Lyon emphasized that the company has had a “positive working relationship” with ONHYM, the ministry, and various contractors in Morocco.

Sound Energy plc is a London-listed upstream gas company with assets in Morocco.

The North African country entered into a gas supply agreement with Sound Energy after the Algerian government decided to terminate the Maghreb Europe pipeline that supplied Spain with Algerian gas through Morocco. The move came after Algeria severed diplomatic ties with Morocco in August 2021, citing alleged “hostility” from Rabat. 

The deal will see Sound Energy supply the pipeline with gas, ensuring the continuity of energy supply to Spain. The move also marks a significant boost to the Moroccan economy, with the country expected to generate substantial revenue from gas exports. 

Under the revival deal, Sound Energy will supply the pipeline with gas for a period of 10 years.

SOURCE: MoroccoWorldNews