Sound Energy PLC told investors that talks are continuing over the gas sales agreement for the Tendrara project, and, an offer has now been received from the Moroccan government.
The non-binding offer envisages Tendrara’s gas being purchased by the “Office National de l’Electricité et de l’Eau Potable” (ONEE), Morocco’s state power firm.
It anticipates gas pricing from 2022 based on a structure that includes a variable element linked to the Brent oil price along with a fixed element to fully cover transportation costs (capped at US$12.2mln per year).
Sound provided an example, based on current Brent pricing at US$70-75 per barrel, which would see it receive between US$8.50 and US$9 per million British thermal units. It also assumed the pipeline fee to be US$1 per mln BTU.
Prior to 2022, the gas would be bought at prices in line with what the Moroccan state sells gas to ONEE.
The company said it will now continue negotiations to close out a binding gas sales agreement which would represent an important milestone in taking the TE-5 field into commercial production.