{"id":8448,"date":"2020-06-30T05:00:50","date_gmt":"2020-06-30T05:00:50","guid":{"rendered":"http:\/\/oilnewskenya.com\/?p=8448"},"modified":"2020-06-30T05:00:50","modified_gmt":"2020-06-30T05:00:50","slug":"sound-energy-signs-lng-heads-of-terms-with-leading-moroccan-energy-group","status":"publish","type":"post","link":"https:\/\/www.oilnewskenya.com\/index.php\/sound-energy-signs-lng-heads-of-terms-with-leading-moroccan-energy-group\/","title":{"rendered":"Sound Energy Signs LNG Heads of Terms with Leading Moroccan Energy Group"},"content":{"rendered":"

Sound Energy has provided the following update in relation to the Company’s micro liquified natural gas (“mLNG”) phase 1 development plan for the TE-5 Horst development (the “Phase 1 Development”) at the Tendrara Production Concession (the “Concession”). This is being pursued alongside the phase 2 full field development plan centred around the development of a 120 km pipeline and central processing facility.<\/span>\u00a0<\/span><\/p>\n

Signature of Heads of Terms and Grant of Exclusivity<\/span>\u00a0<\/span><\/strong><\/p>\n

On 26 June 2020, heads of terms\u00a0 were entered into with a Moroccan conglomerate\u00a0 with significant liquified petroleum gas, butane and propane distribution and marketing operations in Morocco, pursuant to which the Company has now entered into exclusive discussions with the Partner in order to enter into agreements for both the purchase of LNG to be produced from the TE-5 Horst development, as well as the partial financing of the Phase 1 Development by the Partner.<\/span>\u00a0<\/span><\/p>\n

Exclusivity has been granted to the Partner in relation to the Proposed Transaction until\u00a0<\/span>31 December 2020<\/span>. In this context, the Company and its Partner have agreed to use their reasonable endeavours to conclude the Proposed Transaction on the basis of key commercial terms set out in the HOT.<\/span>\u00a0<\/span><\/p>\n

HOT – LNG Gas Sales Agreement<\/span>\u00a0<\/span><\/strong><\/p>\n

Under the HOT, the parties have agreed to use their reasonable endeavours to negotiate and enter into a gas sales agreement pursuant to which Sound Energy Morocco East Limited, on behalf of the Concession joint venture partners, will commit, over a period of 10 years from first gas <\/span>from<\/span>\u00a0the Concession, to produce, process, liquefy and sell to the Partner an annual contractual quantity of 100 million standard cubic metres of gas (approximately 4 billion standard cubic feet of gas per year) from the\u00a0<\/span>Phase 1 Development<\/span>, and the Partner will commit to an annual minimum “Take or Pay” quantity of 90 million standard cubic meters of gas, priced within a range of $7 to $9 per mmBTU with an indexed formula using a combination of the European Title Transfer Facility and United States Henry Hub benchmark indexes.<\/span>\u00a0<\/span><\/p>\n

Proposed Partner Project Funding<\/span>\u00a0<\/span><\/strong><\/p>\n

In order to accelerate the delivery of first gas under the Phase 1 Development Plan, the Partner has also agreed under the HOT to use reasonable endeavours to conclude definitive agreements in respect of a proposed partial financing for the development\u00a0 through: <\/span>\u00a0<\/span><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0<\/span>a \u00a32 million subscription by the Partner for 159,731,651 new Sound Energy ordinary shares at a price of\u00a0<\/span>1.2521<\/span>\u00a0pence per new ordinary share, and<\/span><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0<\/span>a secured commercial loan of $13.5 million provided by the Partner to the Company in respect of the Phase 1 Development, with an 11.5% coupon and 12 year term.<\/span>\u00a0<\/span><\/p>\n

Update re mLNG Production Plant<\/span><\/strong>\u00a0<\/span><\/p>\n

The Company continues to progress negotiations with potential service providers in relation to the design, procurement, construction and operation of the gas processing and liquefaction unit (the “mLNG Facility”) required for the Phase 1 Development and with additional funding partners for the balance of the finance required for the Phase 1 Development.<\/span>\u00a0<\/span><\/p>\n

Despite COVID-19 outbreak restrictions, which have delayed progress of the Phase 1\u00a0<\/span>Development Plan<\/span>, the Company aims to take a Final Investment Decision (FID), subject to the approval of the Concession joint venture partners, during H2 2020.<\/span>\u00a0<\/span><\/p>\n

The Company cautions that whilst the HOT is binding during its Term in the grant of Exclusivity and in its recording of the commitment by the Company and the Partner to use reasonable endeavours to conclude the Proposed Transaction based on the key commercial terms set out in the HOT, the Proposed Transaction remains subject to, inter alia, the negotiation and entry of further binding agreements, to the approval of the Concession joint venture partners and to an FID on the Phase 1 Development being taken.<\/span>\u00a0<\/span><\/p>\n

Further announcements will be made, as appropriate, in due course.<\/span>\u00a0<\/span><\/p>\n

Mohammed Seghiri, Sound Energy’s Chief Operating Officer, commented: <\/span>“We are delighted to announce the signature of these heads of terms and the award of exclusivity for the purchase of LNG from the TE-5 Horst.<\/span>\u00a0<\/span><\/p>\n

In spite of challenging current market conditions we have made significant progress, and these heads of terms, mark an important step forward towards the delivery of the Company’s phase 1 production development plan for the TE-5 Horst at the Tendrara Concession.”<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Sound Energy has provided the following update in relation to the Company’s micro liquified natural gas (“mLNG”) phase 1 development plan for the TE-5 Horst development (the “Phase 1 Development”) … Read More<\/a><\/p>\n","protected":false},"author":24,"featured_media":8449,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[7442,7446,11],"tags":[7351,3183,7692,1428,7687,7688,1629,7689,7690,7691],"class_list":["post-8448","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-countries","category-north-africa","category-top-news","tag-covid-19","tag-final-investment-decision","tag-heads-of-terms","tag-lng","tag-mlng-production-plant","tag-mohammed-seghiri","tag-morocco","tag-sound-energy","tag-te-5-horst","tag-tendrara-concession","entry"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/06\/Morocco-Tendrara.jpg?fit=1280%2C720&ssl=1","jetpack_shortlink":"https:\/\/wp.me\/p5JWkQ-2cg","jetpack-related-posts":[{"id":9618,"url":"https:\/\/www.oilnewskenya.com\/index.php\/morocco-sound-energy-enters-into-a-letter-of-exclusivity-extension-of-lng-heads-of-terms-in-tendrara-phase-1-development\/","url_meta":{"origin":8448,"position":0},"title":"MOROCCO: Sound Energy Enters into a Letter of Exclusivity & Extension of LNG Heads of Terms in Tendrara Phase 1 Development","author":"","date":"January 3, 2021","format":false,"excerpt":"Sound Energy has provided an update in relation to the proposed micro liquefied natural gas (mLNG) phase 1 development project for the TE-5 Horst (the Phase 1 Development) at the Tendrara Production Concession.\u00a0 Letter of Exclusivity\u00a0 Sound Energy Morocco East Limited (SEMEL), the Company's wholly owned subsidiary, has entered into\u2026","rel":"","context":"In "Countries"","block_context":{"text":"Countries","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/countries\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/06\/Morocco-Tendrara.jpg?fit=1200%2C675&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/06\/Morocco-Tendrara.jpg?fit=1200%2C675&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/06\/Morocco-Tendrara.jpg?fit=1200%2C675&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/06\/Morocco-Tendrara.jpg?fit=1200%2C675&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/06\/Morocco-Tendrara.jpg?fit=1200%2C675&ssl=1&resize=1050%2C600 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3x"},"classes":[]},{"id":9102,"url":"https:\/\/www.oilnewskenya.com\/index.php\/morocco-sound-energy-announces-h1-2020-results\/","url_meta":{"origin":8448,"position":2},"title":"MOROCCO: Sound Energy Announces H1 2020 Results","author":"","date":"September 11, 2020","format":false,"excerpt":"Statement from the Executive Chairman Despite the challenging business environment brought on by the Covid-19 global pandemic and exacerbated in the oil and gas sector by a dispute between Russia and Saudi Arabia which led to an increase in supply just as demand was falling due to the economic impact\u2026","rel":"","context":"In 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3x"},"classes":[]},{"id":12129,"url":"https:\/\/www.oilnewskenya.com\/index.php\/morocco-sound-energy-provides-tendrara-phase-1-mlng-development-update\/","url_meta":{"origin":8448,"position":3},"title":"MOROCCO: Sound Energy Provides Tendrara Phase 1 mLNG Development Update","author":"","date":"April 14, 2022","format":false,"excerpt":"-\u00a0\u00a0\u00a0\u00a0 mLNG equipment and services provider Italfluid, has confirmed the issuance of purchase orders for the gas processing and liquefaction packages together with the LNG storage tank; -\u00a0\u00a0\u00a0\u00a0 Site preparation activities by Italfluid and Sound Energy at the Tendrara site location have commenced and are ongoing; -\u00a0\u00a0\u00a0\u00a0 Italfluid is advancing\u2026","rel":"","context":"In "Countries"","block_context":{"text":"Countries","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/countries\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/06\/Morocco-Tendrara.jpg?fit=1200%2C675&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/06\/Morocco-Tendrara.jpg?fit=1200%2C675&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/06\/Morocco-Tendrara.jpg?fit=1200%2C675&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/06\/Morocco-Tendrara.jpg?fit=1200%2C675&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/06\/Morocco-Tendrara.jpg?fit=1200%2C675&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":14286,"url":"https:\/\/www.oilnewskenya.com\/index.php\/morocco-sound-energy-announces-audited-final-results-for-the-year-ended-31-december-2023\/","url_meta":{"origin":8448,"position":4},"title":"MOROCCO: Sound Energy Announces Audited final results for the year ended 31 December 2023","author":"","date":"April 24, 2024","format":false,"excerpt":"HIGHLIGHTS Substantial 2023 Project execution undertaken -\u00a0positioned for significant operational and financial progress through development of pivotal Moroccan Tendrara Production Concession, with rig activities from June 2024 and plant commissioning planned by year end \u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Phase 1 Micro LNG (mLNG) project (Phase 1): o\u00a0\u00a0Completed mLNG tank foundations and manufacturing of the\u2026","rel":"","context":"In "Countries"","block_context":{"text":"Countries","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/countries\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2024\/04\/Morocco-Tendrara.png?fit=1200%2C1200&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2024\/04\/Morocco-Tendrara.png?fit=1200%2C1200&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2024\/04\/Morocco-Tendrara.png?fit=1200%2C1200&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2024\/04\/Morocco-Tendrara.png?fit=1200%2C1200&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2024\/04\/Morocco-Tendrara.png?fit=1200%2C1200&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":11854,"url":"https:\/\/www.oilnewskenya.com\/index.php\/morocco-sound-energy-issues-of-notice-to-proceed-for-tendrara-concession-phase-1-development\/","url_meta":{"origin":8448,"position":5},"title":"MOROCCO: Sound Energy Issues of Notice to Proceed for Tendrara Concession Phase 1 Development","author":"","date":"February 17, 2022","format":false,"excerpt":"\u00a0 Sound Energy has announced the issue to Italfluid Geoenergy S.r.l. of notice to proceed in respect of the project contract for the Tendrara Concession mLNG Facilities Onshore, Kingdom of Morocco, between the Group and the Contractor.\u00a0 The Notice to Proceed has been issued to the Contractor by Sound Energy's\u2026","rel":"","context":"In 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