The British company Sound Energy, owner of the Tendrara gas concession in eastern Morocco, announced on Tuesday that it had entered into a binding gas sale and purchase agreement (the “GSA») Concerning the development of phase 2 of the Tendrara production concession with the Moroccan state-owned company, by which it undertakes to deliver to the Maghreb-Europe gas pipeline (GME) an annual contractual volume of up to 350 million cubic meters of natural gas per year, for a period of ten years.
The media La Razon which takes up the press release published on November 30, for its part, indicates that this gas pipeline is vital for the operation of two factories belonging to important Spanish companies. Graham Lyon, Executive Chairman of Sound Energy, did not hide his joy and said “We welcome this confirmation that the UK – Morocco partnership, ONHYM and Sound Energy is working well, and such a business partnership can strengthen, with the strong support of our shareholders and our local partners, the Kingdom’s expected economic growth of 5.7%. of Morocco despite the COVID-19 pandemic ”.
In the press release from Sound Energy, where the London-based company announces that it has entered into a binding gas purchase and sale agreement with the National Electricity and Drinking Water Board (ONEE), it is stated, also, that: “Sound Energy, the Moroccan upstream gas company, has indicated that it has entered into the GSA, which is in addition to the conditional gas sale agreement linked to the development of phase liquefied natural gas. 1 TE-5 Horst concluded by the Company with Afriquia Gaz and announced by the Company on July 29, 2021, in parallel with its agreement with ONHYM (National Office of Hydrocarbons and Mines) belonging to the State Tendrara Production Concession partner and with the Group the “Tendrara JV Partners)”.
Tendrara JV’s partners have conditionally committed to produce, process and deliver gas from the Tendrara production concession, in accordance with ONEE gas specifications, to the Gaz Maghreb-Europe (GME) pipeline connecting Algeria to Spain and crossing Morocco, for an annual contractual volume of up to 350 million cubic meters of natural gas per year for a period of 10 years, with an annual volume of catch or payment of 300 million cubic meters. As part of this contract, the press release further indicates, Sound Energy and its partners have made a conditional commitment to produce, process and deliver the gas from the Tendrara production concession, in accordance with the specifications required by ONEE, at GME which connects Algeria to Spain and crosses Morocco.
The agreement between ONEE and Sound Energy is conditional, among other things, on the granting of all authorizations and permits necessary for the construction of gas installations in phase 2 and on the final approval of the investment decision by the Ministry of Energy, Transition and Sustainable Development and the Ministry of Economy and Finance. Other required conditions: the conclusion of an interconnection agreement between Sound Energy and the company in charge of operating the GME, and the start of connection works between the Tendrara field and the GME. Those conditions must be met within 90 days of signing the agreement, the statement said, but an extension is allowed with the consent of all parties.
“’The GSA agreement is an important and long overdue step that will allow the Company to advance development planning for the proposed development of Phase 2 of TE-5 Horst,” said Graham Lyon. He also points out that several important financial partners have shown ‘great interest’ in contributing to the construction of the Kingdom’s long-term gas infrastructure and the supply of gas to Morocco and for Morocco.