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Eskom wanted. NERSA had only approved 6-7% the key issues the utility faced in the coming year.
rises. The central issues remained the compa-
Eskom said in February that it had lost ny’s debt, alongside unbundling proposals,
ZAR166bn ($10.9bn) of revenues dating back to load-shedding and weak power sales and
2014, and ZAR27bn ($1.8bn) in 2018-19 because revenues.
NERSA had refused to raise tariffs as Eskom had However, De Ruyter did state clearly that
wanted. the company welcomed the liberalisation of the
Eskom warned at the time that it needed the country’s power sector, with increased competi-
high tariff increases in order to avoid an “existen- tion from IPPs. He also said Eskom would take
tial crisis that would cause catastrophic harm to a full part in the energy transition. The company
Eskom and the national economy.” is 86% dependent on coal, and he said it was now
Meanwhile, last week Eskom CEO André De making detailed plans to play its part in driving
Ruyter identified the tariff dispute with NERSA renewables in South Africa.
in a bid to charge cost-reflective tariffs as one of
FUELS
Sound Energy signs HoT with
Moroccan firm for micro-LNG project
MOROCCO UK-LISTED Sound Energy has taken a step statement added.
towards teaming up with a local partner to dis- The other agreement slated for discussion
tribute and market production from the small- provides for the Moroccan firm to help finance
scale gas liquefaction plant it intends to build at the Phase 1 Development project at Tendrara.
the Tendrara licence area in eastern Morocco. The proposed terms involve a share subscription
In a statement, Sound Energy said it had under which the partner would pay GBP2mn
entered into a heads of terms (HoT) with a ($2.46mn) for 159,731,651 new shares in
Moroccan conglomerate on June 26. It did not Sound Energy at a price of GBP0.01251 each.
identify the Moroccan firm, but it did say that The Moroccan company would also take out a
the HoT provided for the two sides to conduct secured commercial loan worth $13.5mn, with
exclusive negotiations with each other until a coupon of 11% and a term of 12 years.
December 31. Sound Energy did not comment further on
The goal of these discussions, the statement the talks with its local partner. It did say, though,
said, is for Sound Energy to negotiate “agree- that it intended to take a final investment deci-
ments for both the purchase of LNG to be pro- sion (FID) on Phase 1 Development in the sec-
duced from the TE-5 Horst development, as well ond half of 2020. Additionally, it stated that it was
as the partial financing of the Phase 1 Develop- making progress in negotiations with potential
ment by the partner.” The company is doing so contractors with respect to the design, procure-
while also drawing up plans for Phase 2 Develop- ment, construction and operation of the micro-
ment that envision the construction of a 120-km LNG plant that will be built during the first stage
pipeline and processing facility at Tendrara. of the project.
One of the agreements the companies will Mohammad Seghiri, the CEO of Sound
discuss is a gas sales deal that calls for Sound Energy, expressed satisfaction with recent
Energy to extract, refine, liquefy and sell to its developments. “We are delighted to announce
Moroccan partner the equivalent of 100mn the signature of these heads of terms and the
cubic metres per year of gas over a period of 10 award of exclusivity for the purchase of LNG
years. The proposed document would also have from the TE-5 Horst,” he said, according to the
take-or-pay provisions under which the Moroc- company statement. “In spite of challenging
can firm would have to take delivery of at least current market conditions, we have made sig-
90 mcm per year of gas. It would set the price of nificant progress, and these heads of terms mark
the gas “within a range of $7 to $9 per mmBTU an important step forward towards the delivery
with an indexed formula using a combination of of the Company’s phase 1 production develop-
the European Title Transfer Facility and United ment plan for the TE-5 Horst at the Tendrara
States Henry Hub benchmark indexes,” the Concession.”
Week 26 02•July•2020 www. NEWSBASE .com P9
