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.
The Notice to Proceed has been issued to the Contractor by Sound Energy’s wholly-owned subsidiary, Sound Energy Morocco East Limited (SEMEL) and, following an initial payment of US$5 million by SEMEL to the Contractor, will oblige the Contractor to execute the works set out in accordance with the Project Contract for the provision of a gas processing and liquefaction facility in relation to the Phase 1 development of the Tendrara Concession.
Following the issue of the Notice to Proceed, the Company has also notified Afriquia Gaz S.A. that pursuant to the Loan Note Subscription Agreement entered into between the Company and Afriquia on 29 December 2021, all necessary undertakings and agreements have been completed and that the Project Contract is now in full force and effect. As a result, the LNSA is now in full force and effect and the Group intends to immediately draw down a proportion of the funds available under the LNSA to meet the Initial Payment.
Graham Lyon, Sound Energy’s Executive Chairman, commented:
“We are delighted to have issued the Notice to Proceed to Italfluid and to have satisfied all conditions to give effect to both the Project Contract and LNSA, which means that following receipt of the Initial Payment by Italfluid, the execution phase of our fully-funded Phase 1 micro LNG development of the Tendrara Concession will be underway. This is a key milestone for the Company and we look forward to working with our strategic partners, Italfluid and Afriquia Gaz, together with our joint venture partner, ONHYM, in developing the project and delivering gas to the Moroccan market in around 2 years.”