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Rabat – Sound Energy, a UK-based and Morocco-focused natural gas production company, has signed a 10-year partnership with Morocco’s Afriquia Gaz concerning the sale of liquid natural gas (LNG).
“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,” Sound Energy’s Executive Chairman Graham Lyon said in a statement.
As per the agreement, Sound Energy will deliver to Afriquia Gaz between 475 and 564 cubic meters of LNG per day. Afriquia Gaz will be bound by the “Take or Pay” clause under which the company has committed to purchase an annual minimum equivalent to 475 cubic meters of LNG per day, equivalent to approximately 100 million cubic meters per year.
The agreement also extends several conditions for the two parties, namely, Tendrara concession joint venture’s approval of the agreement, the finalization of a $18 million secured loan with Afriquia acting as the lender and Sound Energy’s subsidiary as a borrower, with an annual coupon of 6% over a 12-year term.
Lyon was “pleased” with the agreement and happy to be working on “”improved terms” for the aforementioned loan, “upon which the LNG sale and purchase agreement is, inter alia, conditional,” the Executive Chairman explained.
Earlier in the year, Sound Energy announced acquiring Schlumberger’s exploration permits in Eastern Morocco for $1 (MAD 8.87), which will increase the company’s share in the area from 27.5% to 75%. Sound Energy will have to pay Schlumberger Holdings between 8% and 11% of all net profits from the permits for up to 12 years.
Sound Energy also negotiated an exclusive five-year contract with Italfluid Geoenergy making the Italian company the exclusive designer, constructor, operator, and maintainer of the joint-venture’s LNG plants.
