Sound Energy may delay Morocco LNG plans

Sound Energy said Thursday it could delay a project aimed at developing a small-scale LNG facility in Morocco due to the uncertainty created by the Covid-19 coronavirus pandemic.

The Morocco-focused upstream gas company announced plans earlier this year for the LNG project. The project would receive gas from the TE-5 Horst field in the Tendrara production concession.

The company sees this project as a fast way to garner cash flow from its gas discoveries in Tendrara ahead of a much bigger plan involving a 120-kilometer gas export pipeline.

Sound Energy aimed to take a final investment decision on this development during the second quarter of this year and produce first LNG during 2021.

The company would deliver the fuel to industrial customers in Morocco.

However, the company is now reconsidering its options as oil and gas prices crashed to record lows due to the outbreak of the Covid-19 pandemic.

“There are unprecedented societal and market conditions following Covid-19 virus outbreak which increases the risk that there could be delay in the company’s micro-LNG strategy implementation,” Sound Energy said in its quarterly report.

The company currently sees no significant impact on its operations from Covid-19.

But if the current situation becomes prolonged then it could lead to a delay in the LNG plan and the ability of the company to raise additional funds through an equity raise, both impacting Sound Energy’s liquidity, it said.

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