Sound Energy, ONHYM sign connection agreement to Maghreb-Europe gas pipeline

Sound Energy, the Moroccan focused upstream gas company and holder of the Tendrara gas concession, announced this Tuesday that it has concluded an agreement with l’Office National des Hydrocarbures et des Mines (ONHYM) to connect to the Maghreb-Europe gas pipeline (GME).

This agreement marks another important step towards the effective entry into force of the agreement signed by ONEE and Sound Energy in November 2021 for the sale of natural gas from the Tendrara Concession in Eastern Morocco over a 10 year period.

Gas company Sound Energy has signed a pipeline tie-in agreement to the Maghreb-Europe Gas pipeline with ONHYM for gas from Phase 2 of the Tendrara project, the company said in a press release.

The GME Pipeline is owned and operated by ONHYM which got operatorship from the previous operator on November 1, 2021.

Under the pipeline tie-in agreement, ONHYM has now approved the connection of the Tendrara Production Concession via a gas export spur pipeline to the GME Pipeline, which will be built over 120 km.

Under the agreement, following the provision of certain technical information by Sound Energy regarding the Tendrara Production Concession export spur pipeline and the approval of proposed technical and financial terms for the construction of the tie-in infrastructure, ONHYM has committed to put in place the tie-in infrastructure between the Tendrara export pipeline and the GME pipeline, enabling Tendrara gas to reach all clients connected to GME, the press release explained.

The agreement fulfills one of the key remaining conditions to Sound’s binding gas sale and purchase agreement for the sale of natural gas from the Tendrara Concession in Eastern Morocco over 10 years with Morocco’s state-owned power company Office National de l’Electricité et de l’Eau Potable (ONEE).

The gas in question will also be sold from Tendrara’s Phase 2. The terms of the gas sale agreement were announced by the company on November 30, 2021, but the deal was recently extended.

Following the Pipeline Tie-in Agreement, the gas sale agreement remains conditional upon all necessary authorizations and permits having been granted for the construction of the Phase 2 gas installations, the final investment decision – when taken – being approved by the Moroccan Ministry of the Energy Transition and Sustainable Development, and the Ministry of Economy and Finance.

“The completion of the tie-in agreement to the GME pipeline marks further progress on the various conditions required to reach final investment decision on the Phase 2 development of the Tendrara production concession. This development is a key element of the roadmap released by the Energy Ministry in August 2021 to supply future Moroccan energy,” Graham Lyon, Sound Energy’s Executive Chairman, said.

During a conference held Monday in Rabat, energy minister Leila Benali said that Morocco will access for the first time the LNG market in April using the existing infrastructure in the country and in Europe.

Over the past two months, the minister had said in multiple appearances that Morocco was in talks with Spain to use its LNG terminals and regasifications units to import gas through the Maghreb-Europe pipeline, which has become fully owned by Morocco since October 2021.

Morocco’s access to the LNG market is conducive to reducing greenhouse gas emissions, she told an energy conference in Rabat, insisting that “natural gas is a non-negotiable pillar of Morocco’s energy strategy.”