Sound Energy to start work on small LNG plant in Morocco

London-listed Sound Energy said it has issued the notice to proceed to Italian contractor Italfluid for its small-scale LNG facility in Morocco.

This move follows the completion of Sound Energy’s LNG supply deal with Morocco’s LPG distributor Afriquia Gaz in December. Under this deal, Afriquia Gaz will buy not less than 171,000 cubic meters of LNG per year and the firm also provided an $18 million loan.

According to a statement on Wednesday, Sound Energy’s unit, Sound Energy Morocco East or Semel, issued the notice to proceed to Italfluid to build the mini LNG plant.

Also, Semel will make an initial payment of $5 million on behalf of the Tendrara JV to the contractor.

This would 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 first phase of the Tendrara concession, the statement said.

Following the notice to proceed, Sound Energy has also notified Afriquia Gaz that the project contract is now in full force and effect.

As a result, the loan agreement between the two firms 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.”

“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,” Graham Lyon, Sound Energy’s executive chairman, said.

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