Sound Energy Morocco East Limited (“SEMEL”), a subsidiary of Sound Energy PLC, a well-funded European and Mediterranean oil and gas exploration and production company, has entered into a letter of exclusivity with Italfluid Geoenergy S.r.l, in regards to its proposed micro liquefied natural gas project phase one development.
Pursuant to this letter, the parties have agreed to negotiate and enter into a binding project contract that will on entry commit Italfluid to design, construct, commission, operate, maintain and let to SEMEL the micro liquefied natural gas plant, which will also treat and process raw gas from the Phase 1 Development prior to liquefaction.
Heads of terms with a Moroccan conglomerate
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In June last year, Sound Energy had announced that it had entered into heads of terms with a Moroccan conglomerate pursuant to which the Company had agreed to commence exclusive discussions with the conglomerate in order to enter into agreements for both the purchase of LNG to be produced from the Phase 1 Development, as well as the partial financing thereof (“Exclusivity”). Under the heads of terms, Exclusivity was granted to the Moroccan conglomerate until 31st December last year.
The Company, in the recent announcement, said that negotiation of the definitive agreements with the Moroccan conglomerate has progressed well over recent months, however, given the inherent linkage between Project Contract envisaged to be entered into with Italflluid and the suite of definitive agreements planned to be entered into with the “Gas Offtaker”, the Company has agreed to extend the period of Exclusivity with the Gas Offtaker to 31 March this year, coincident with the period of exclusivity now granted to Italfluid.
Synchronizing the timing of these respective negotiations provides a clearer and de-risked pathway to taking a final investment decision together with the Concession joint venture partners on or before 31 March 2021.
