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Sound Energy moots micro-LNG project for Tendrara in Morocco
PROJECTS & COMPANIES
UK-LISTED Sound Energy has said it hopes to pursue a small-scale LNG project at the Tendrara licence area in eastern Morocco.
In a statement dated February 17, the com- pany said it was seeking to revise the full- eld development plan for Tendrara in order to make the micro-LNG project its rst priority. Doing so will help generate early cash ows from the block, it said.
Sound Energy did not reveal many details of the proposed revisions, but it did say that the micro-LNG scheme provided for the construc- tion of a liquefaction plant for natural gas from TE-Horst, a eld within Tendrara. It described this solution as “innovative, fast-track [and] cost-e cient” and said it would pave the way towards the execution of the full- eld develop- ment plan, with its more expansive outlook and longer timescale, at a later date.
e company said that it hoped to begin pro- ducing LNG and delivering it to industrial users in Morocco sometime in 2021, pending approval from any potential partners in the Tendrara deal. is milestone would follow a nal investment decision (FID) in the second quarter of 2020, it added, noting that its existing cash resources were adequate to cover working capital require- ments until that time.
Sound Energy hopes to move the project for- ward during ongoing negotiations with Moroc- co’s O ce National de l’Electricité et de l’Eau Potable on the full eld development plan and on a gas sales agreement. In the meantime, it has also started talks with potential end-users and
distributors of LNG in Morocco. It is also work- ing towards agreement with potential sources of funding and suppliers of equipment, according to the statement.
e micro-LNG project is coming to light as
Sound Energy expands its search for a partner
in the Tendrara contract. e company began
exclusive negotiations with a potential investor
last November, but on February 17 it revealed
that the other party had concluded due diligence
without signing a sales and purchase agreement
(SPA) or providing satisfactory proof of its abil-
ity to fund the transaction. “Accordingly, dis-
cussions continue with the purchaser but these
discussions are no longer exclusive, and there
can be no certainty that the proposed transac- to light as Sound tion will proceed or will successfully conclude,”
it stated.
The company did not name any potential
partners. But its acting CEO Mohammad Seghiri
said that the board of directors had been “active
in considering and refining in parallel other
options to monetise its asset at Tendrara.” the Tendrara
Seghiri added: “We continue to believe that we have a valuable position in the Moroccan energy sector encompassing a signi cant dis- covery in Tendrara with exciting additional exploration upside potential. e micro-LNG development plan has been identi ed as an ini- tial and rapid development strategy to prioritise early monetisation of the existing gas discovery, which can in turn facilitate a larger ultimate development. I look forward to reporting further on our progress in due course.”™
contract.
The micro-LNG project is coming
Energy expands its search for a partner in
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w w w. N E W S B A S E . c o m Week 07 20•February•2020