Sound Energy has finally completed its previously announced LNG supply deal with Morocco’s LPG distributor Afriquia Gaz.
The firm said in a statement on Wednesday the LNG GSA is now unconditional as the duo finalized all the remaining conditions precedent.
In July, the London-listed firm said it had entered into a binding deal with Afriquia Gaz for a period of ten years.
Afriquia Gaz would buy not less than 171,000 cubic meters of LNG per year from Sound Energy’s small-scale LNG facility.
This equals about 100 million cubic meters a year of gas from the first phase of the LNG project which would receive gas from the TE-5 Horst field in the Tendrara production concession.
$18 million loan
Sound Energy recently said the duo had agreed to extend the completion date for the supply contract to allow more time as they still needed to finalize a loan agreement.
Under this deal, Afriquia Gaz will provide an $18 million secured loan to Sound Energy.
“In satisfying the final material condition precedent to the LNG GSA, the company has entered into agreements with Afriquia Gaz in respect of an $18 million 6 percent secured loan note maturing in December 2033,” the firm said.
Based on the issued share capital of Sound Energy Meridja, the deal allows the firm to draw down the amount in whole or in tranches over a three-year period starting on December 24, it said.
Also, Sound Energy would use the loan towards the development of the Tendrara production concession.
“We are delighted to have executed all loan note documentation which ensures that Sound Energy will be fully funded for its share of Phase 1 development capital,” Graham Lyon, Sound Energy’s executive chairman, said.
“This is a key milestone for the company and we will now move to issuing the notice to proceed to Italfluid and drawing down initial funding from the Afriquia Gaz loan in order to proceed with execution of the Phase 1 development,” Lyon said.