Sound Energy is going ahead with its micro LNG (mLNG) scheme in Morocco.
The London-listed minnow has issued notice to proceed to Italfluid. This covers a small-scale LNG project on the Tendrara concession.
Sound has told Afriquia Gaz that it will begin drawing down funds. The two reached a loan note subscription agreement on December 29.
“We are delighted to have issued the Notice to Proceed to Italfluid and to have satisfied all conditions to give effectiveness to both the project contract” and funding”, Graham Lyon, Sound Energy’s Executive Chairman, said.
“This is a key milestone for the company and we look forward to working with our strategic partners, Italfluid and Afriquia Gaz, together with our joint venture partner, ONHYM, in developing the project and delivering gas to the Moroccan market in around two years.”
Afriquia agreed to provide $18 million, at a rate of 6%, maturing in December 2033. Afriquia will handle the delivery of the LNG via truck.
The LNG plan involves Sound producing around 100 million cubic metres per year. House broker SP Angel has said the price paid will be around $7.9 per mmBtu.
There is an expansion plan, under which Sound would supply gas to Office National de l’Electricite et de l’Eau potable (ONEE). This would increase supply to 350 mcm per year of gas. This phase would involve the Gazoduc Maghreb Europe (GME) pipeline.
Sound has discovered 650 billion cubic feet (18.4 billion cubic metres) of gas at TE-5 Horst, in eastern Morocco.