Sound Energy signs 10-year LNG sales agreement with Afriquia Gaz
Sound Energy, Morocco-focused upstream gas company, has announced the signing of a binding 10 year LNG sales agreement with Afriquia Gaz 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.
Pursuant to this agreement, Sound Energy will sell not less than 171,000 cubic metrs of LNG per year (approx. 100 million cubic metres a year of gas to be produced and liquefied from the Phase 1 Development) on behalf of the Concession joint venture (the LNG SPA).
”We are delighted to announce the signature of a binding ten-year LNG sales agreement for the Phase 1 development covering the sale of not less than 100 million cubic metres of gas in a liquified form per year,” Graham Lyon, Sound Energy’s Executive Chairman, said.
“In addition, the execution of the previously announced equity subscription agreement and the £2 million (US$2.79m) equity placing cements the strategic alignment between Sound Energy and Afriquia Gaz (a subsidiary of AKWA Group). This is a key milestone in moving forward towards the final investment decision and notice to proceed for the Tendrara Phase 1 Development.”
Under the LNG SPA, Sound Energy 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.
“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,” Graham said.
“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,” he added.