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Sound Energy secures EIA approval for LNG development in Morocco

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LNG Industry,

Sound Energy has provided an update on its activities in Eastern Morocco. Most notably, the company has confirmed receipt of a further Environmental Impact Assessment (EIA) approval and land corridor rights in respect of the Tendrara Gas Export Pipeline (TGEP). Details of the update can be found below.

EIA of the gas treatment plant and compression station (including liquefaction)

On 17 February 2020 Sound Energy announced its plan to pursue the first phase of TE-5 Horst development at the Tendrara Production Concession, via a micro LNG production plan. Negotiations are ongoing with equipment providers for the LNG production facility solution and with industrial customers and distributors in relation to a gas offtake agreement.

The company has now received EIA approval from the Moroccan Ministry of Energy, Mines and Environment related to the building of the proposed gas treatment plant and compression station (CPF) at the Concession, including the option for gas liquefaction. Receipt of the CPF EIA approval follows meetings of the National Committee from the Moroccan Ministry of Energy, Mines and Environment to review the CPF EIA held on 10 October 2019 and 28 January 2020 and receipt of EIA approval for the 120 km TGEP connecting the proposed CPF to the Gazoduc Maghreb Europe pipeline (GME).

The inclusion of gas liquefaction within the CPF EIA approval enables the LNG development planned as Phase 1 of the Concession field development plan, with the TGEP led full field development of the Concession following as Phase 2.

TGEP corridor rights

Sound Energy continues to progress the TGEP led full field development of the Concession alongside the LNG production strategy and has advised that, following discussions with representatives of Morocco’s Ministry of Interior and of the Forestry Department to obtain rights through a long-term lease agreement for a 50 m wide corridor along the entire 120 km length of the TGEP, formal land access approvals have been received from the Ministry of Interior and the Forestry Department. The company will now seek to agree the tariff for the land access with the Ministry.

The land access approvals received so far account for 99.9% of the land covering the entire length of the 50 m wide TGEP corridor. The remaining land approvals required, covering land required for the three principal blacktop roads and five river crossings along the TGEP route, are to be sought at a later date, after the Final Investment Decision (FID) has been taken.

Tendrara gas sales agreement (GSA) memorandum of understanding (MOU)

Sound Energy has confirmed that GSA negotiations are continuing, but has announced that a binding GSA is not expected to be entered into prior to 31 March 2020. In order to extend the period for negotiations of the final GSA with Morocco’s Office National de l’Electricité et de l’Eau Potable (ONEE), the state power company of Morocco, beyond 31 March 2020, the company expects to enter into a further extension to the previously entered GSA MOU shortly.

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