{"id":9618,"date":"2021-01-03T19:32:19","date_gmt":"2021-01-03T19:32:19","guid":{"rendered":"https:\/\/oilnewskenya.com\/?p=9618"},"modified":"2021-01-03T19:32:19","modified_gmt":"2021-01-03T19:32:19","slug":"morocco-sound-energy-enters-into-a-letter-of-exclusivity-extension-of-lng-heads-of-terms-in-tendrara-phase-1-development","status":"publish","type":"post","link":"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\/","title":{"rendered":"MOROCCO: Sound Energy Enters into a Letter of Exclusivity & Extension of LNG Heads of Terms in Tendrara Phase 1 Development"},"content":{"rendered":"

Sound Energy has<\/span> 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.<\/span>\u00a0<\/span><\/p>\n

Letter of Exclusivity<\/span><\/strong>\u00a0<\/span><\/p>\n

Sound Energy Morocco East Limited (SEMEL), the Company’s wholly owned subsidiary, has entered into a letter of exclusivity with Italfluid Geoenergy S.r.l. pursuant to which the parties have agreed to use their reasonable endeavours to negotiate and enter into a binding project contract which will on entry commit Italfluid to design, <\/span>construct, commission, operate, maintain and let to SEMEL a mLNG Plant (the mLNG Plant) which can produce LNG. The mLNG Plant, which will also treat and process raw gas from the Phase 1 Development prior to liquefaction, is a substantial part of the surface facilities required to be built and operated as part of the Phase 1 Development.<\/span>\u00a0<\/span><\/p>\n

Under the LoE, the Group has granted a period of exclusivity to Italfluid until 31 March 2021 during which time the parties have agreed to use their reasonable endeavours to seek to conclude and enter into the Project Contract on the basis of key commercial terms set out under the LoE (“Proposed Transaction”) and as summarised below:<\/span>\u00a0<\/span><\/p>\n

a.\u00a0\u00a0\u00a0 The mLNG Plant shall be designed, constructed, commissioned, operated and maintained by Italfluid for SEMEL in consideration for the Initial Payments and the Daily Rental Payments.<\/span>\u00a0<\/span><\/p>\n

b.\u00a0\u00a0\u00a0 The term of the Project Contract shall be five (5) years.<\/span>\u00a0<\/span><\/p>\n

c.\u00a0\u00a0\u00a0 An initial Payment of\u00a0<\/span>five<\/span>\u00a0million US Dollars (US$<\/span>5<\/span>,000,000) due from SEMEL to Italfluid within 30 days of issuance of the notice to proceed with the Phase 1 Development and\u00a0<\/span>two<\/span>\u00a0million US Dollars (US$<\/span>2<\/span>,000,000) due from SEMEL to Italfluid within 30 days of notification from the SEMEL to Italfluid of the successful commissioning (including production build-up) of the mLNG Plant.<\/span>\u00a0<\/span><\/p>\n

d.\u00a0\u00a0\u00a0 During each day of each contract year in which Italfluid\u00a0<\/span>has evidenced to the satisfaction of SEMEL, that the mLNG Plant can deliver a guaranteed daily volume, a daily rental payment of\u00a0<\/span>thirty-six thousand US Dollars (US$36,000) per day shall be payable to Italfluid from SEMEL.<\/span>\u00a0<\/span><\/p>\n

The Company cautions that whilst the LoE is binding during its term in the grant of Exclusivity and in its recording of the commitment by SEMEL and Italfluid to use reasonable endeavours to conclude and enter into a Project Contract based on the key commercial terms set out in the LoE, the Proposed Transaction remains subject to, inter alia, the negotiation of and entry into a binding agreement, 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

Italfluid is an integrated service company which provides certain upstream petroleum services, including the design, construction, commissioning and maintenance of process plants and hydrocarbon processing, including gas liquefaction to produce liquified natural gas.<\/span>\u00a0<\/span><\/p>\n

LNG Heads of Terms with Leading Moroccan Energy Group<\/span><\/strong>\u00a0<\/span><\/p>\n

The Company announced on 29 June 2020\u00a0<\/span>that it had entered into a heads of terms\u00a0 with a Moroccan conglomerate (the Gas Offtaker) pursuant to which the Company had agreed to commence exclusive discussions with the Gas Offtaker in order to enter into agreements for both the purchase of LNG to be produced from the Phase 1 Development, as well as the partial financing thereof (“Exclusivity”). Under the HOT, Exclusivity was granted to the Gas Offtaker until 31 December 2020.<\/span>\u00a0<\/span><\/p>\n

The Company is pleased to announce that negotiation of the definitive agreements with the Gas Offtaker pursuant to the HOT has progressed well over recent months however given the inherent linkage between Project Contract envisaged to be entered into with Italflluid and the suite of definitive agreements planned to be entered into with the Gas Offtaker, the Company has agreed to extend the period of Exclusivity with the Gas Offtaker under the HOT to 31 March 2021, coincident with the period of exclusivity now granted to Italfluid. Synchronising the timing of these respective negotiations provides a clearer and de-risked pathway to taking a final investment decision together with the Concession joint venture partners on or before 31 March 2021.<\/span><\/p>\n

\u00a0<\/span>Mohammed Seghiri, Sound Energy’s Chief Operating Officer, commented:<\/p>\n

\u00a0<\/span>“We are very pleased to announce the signature of this Letter of Exclusivity with Italfluid for the proposed provision and leasing of the mLNG Plant. The Company has worked with Italfluid in Morocco in the past and I am pleased to continue developing our partnership with such a technically assured contractor in support of the Phase 1 Development of the TE-5 Horst.<\/span><\/p>\n

\u00a0<\/span>The mLNG Plant is the most complex element and most significant capital requirement of the proposed Phase 1 Development therefore today’s announcement of a proposed leasing structure, which when combined with the financing proposed to be provided by the Gas Offtaker, would secure the balance of funding required by Sound Energy for the Phase 1 Development, is a key milestone for the Company as we move towards FID.”<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

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 … 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":[8820,3155,3721,7699,8819,8817,1428,1483,8818,7689,7690,7758],"class_list":["post-9618","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-countries","category-north-africa","category-top-news","tag-commissioning","tag-construction","tag-design","tag-hot","tag-italfluid","tag-italfluid-geoenergy-s-r-l","tag-lng","tag-maintenance","tag-mlng-plant","tag-sound-energy","tag-te-5-horst","tag-tendrara-production-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-2v8","jetpack-related-posts":[{"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":9618,"position":0},"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 "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":15407,"url":"https:\/\/www.oilnewskenya.com\/index.php\/morocco-sound-energy-announces-first-commissioning-gas-at-the-tendrara-gas-development\/","url_meta":{"origin":9618,"position":1},"title":"MOROCCO: Sound Energy Announces First Commissioning Gas at the Tendrara Gas Development","author":"","date":"December 8, 2025","format":false,"excerpt":"Sound Energy has announced that it has received notification from the operator of the Tendrara Production Concession, Mana Energy Ltd (55%), of the commencement of the initial commissioning activities for the TE-5 Horst development project in the Tendrara Production Concession\u00a0that first gas has entered the gas gathering system (GGS) in\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\/2023\/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\/2023\/06\/Morocco-Tendrara.jpg?fit=1200%2C675&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2023\/06\/Morocco-Tendrara.jpg?fit=1200%2C675&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2023\/06\/Morocco-Tendrara.jpg?fit=1200%2C675&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2023\/06\/Morocco-Tendrara.jpg?fit=1200%2C675&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":12883,"url":"https:\/\/www.oilnewskenya.com\/index.php\/morocco-sound-energy-reports-micro-lng-development-progress-amendment-of-italfluid-project-contract\/","url_meta":{"origin":9618,"position":2},"title":"MOROCCO: Sound Energy Reports on Micro LNG Development Progress & Amendment of Italfluid Project Contract","author":"","date":"November 29, 2022","format":false,"excerpt":"Sound Energy has provided a progress update on its Phase 1 micro LNG development and announced an amendment to the project contract entered into between Italfluid Geoenergy S.r.l. \u00a0and Sound Energy and\u00a0together with the Contractor in respect of the design, procurement, construction, operation and maintenance of Tendrara Concession micro LNG\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":11477,"url":"https:\/\/www.oilnewskenya.com\/index.php\/morocco-sound-energy-announces-phase-1-development-loan-note-financing-and-lng-sale-purchase-agreement\/","url_meta":{"origin":9618,"position":3},"title":"MOROCCO: Sound Energy Announces Phase 1 Development Loan Note Financing and LNG Sale & Purchase Agreement","author":"","date":"January 1, 2022","format":false,"excerpt":"Sound Energy, the energy transition company, is delighted to announce the entry of binding conditional agreements in respect of a US$18 million Phase 1 Tendrara LNG Development loan note financing and that, with the other remaining conditions precedent to the Phase 1 LNG gas sales agreement announced by the Company\u2026","rel":"","context":"In 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3x"},"classes":[]},{"id":10644,"url":"https:\/\/www.oilnewskenya.com\/index.php\/sound-energy-enters-lng-spa-with-afriquia-gaz\/","url_meta":{"origin":9618,"position":4},"title":"Sound Energy Enters LNG SPA with Afriquia Gaz","author":"","date":"July 29, 2021","format":false,"excerpt":"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\u00a0 at the Tendrara Production Concession.\u00a0 Highlights\u00a0 \u00b7\u00a0\u00a0\u00a0\u00a0Ten (10) year take or pay LNG sale and purchase agreement entered into with Afriquia Gaz \u00b7\u00a0\u00a0\u00a0\u00a0\u00a32 million\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":9618,"position":5},"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 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