Sound Energy has given a front end engineering and design (FEED) contract to a consortium of Enagas, Elecnor and Fomento related to the construction of a 20inch pipeline and facilities associated with its Tendrara gas discovery, onshore Morocco.
Image: Pipeline system. Photo: courtesy of supakitmod/Freedigitalphotos.net.
Under a build-own-operate-transfer (BOOT) structure, the consortium has been granted exclusivity to finalize the funding, construction and operation for the pipeline and the central processing facility in eastern Morocco.
Sound Energy CEO James Parsons said: “This is a hugely important milestone for our Company and I am delighted that Sound Energy is playing such a pivotal role in unlocking the first significant scale indigenous gas production in Morocco.
“For Sound Energy and its shareholders, this innovative BOOT structure means that the Company is now firmly on the pathway to commercialising our existing and future gas resources in Eastern Morocco, all without additional equity dilution.”
The consortium is expected to soon commence FEED process on a gas processing plant and the gas pipeline in the Figuig Province which will deliver about 60mmscf/d of gas from the Tendrara license to the Gas Maghreb-Europe (GME) pipeline system.
Along with the FEED, the consortium will work on plans to secure access to nearly $184 million of development capital needed to finance the project.
Sound Energy said that the consortium will be responsible for the construction of the project and for its operation for 15 years. This will be subject to completion of the FEED process and also of a final BOOT contract with related debt funding put in place.
FEED is likely to take around six months to complete, after which Sound Energy could reach the final investment decision (FID) on the onshore gas project.
In last September, Sound Energy said that it had secured a funding offer from the Advisory & Finance Group Investment Bank (AFG) in the range of $60-100m for the execution of the Tendrara gas export pipeline project (TGEP).