A significant accomplishment for the British energy business Sound Energy is the announcement that its micro-liquefied natural gas (LNG) project at the Tendrara production concession in Morocco will begin to generate profits in the early months of 2024.
The London-listed firm announced its audited final results for 2022 in a press release, highlighting the fact that phase 1 LNG export is anticipated to begin in 2024.
The energy business stated that the main civil work, the foundations for the LNG tanks, was finished and tested in the first quarter of 2023.
With the micro-LNG development at Tendrara contractually scheduled to generate “maiden revenues” in early 2024, the company’s Executive Chairman, Graham Lyon, emphasized that 2022 was a year of “real tangible progress” for Sound Energy.
The energy company brought up the March 2022 Maghreb-Europe pipeline interconnection agreement with Morocco’s Hydrocarbons and Mines Office (ONHYM) with regard to the second stage of the development of the Moroccan Tendrara project.
In accordance with the contract, ONHYM gave its approval for the connection of the Tendrara Production Concession to the Maghreb-Europe pipeline via a gas export spur pipeline.
Although ministerial permission is still pending, the first “complementary period” of the Grand Tendrara exploration licences has started, according to the UK’s Sound Energy.
The business also declared that the exploration permissions for Sidi Moktar and Anoual would be extended for a another year, emphasizing that the choice is still pending ministerial approval.
While disruptive circumstances, such a tax battle with Moroccan authorities, hampered Sound Energy’s operations in 2022, engineering and production both advanced.
The business has handled its tax problems, enabling it to use its resources as efficiently as possible for field development.
“UK’s Sound Energy entered into a settlement agreement with Morocco’s tax authority on a phased payment schedule back ended over 6 years of approximately US$2.5 million as a full and final settlement against a claim of approximately US$23.95 million,” the business said in a news release.
Lyon underlined the “positive working relationship” the business has had with ONHYM, the government, and various contractors in Morocco.
Upstream gas business Sound Energy plc is based in London and has interests in Morocco.
After the Algerian government chose to shut down the Maghreb Europe pipeline, which provided Spain with Algerian gas through Morocco, the North African nation signed into a gas supply agreement with Sound Energy. Following Algeria’s severing of diplomatic ties with Rabat in August 2021 due to alleged “hostility” from Rabat, Rabat made the decision.
As part of the agreement, Sound Energy will feed the pipeline with gas, assuring Spain’s continued access to energy. With the country anticipating huge cash from gas exports, the decision also represents a significant boost for the Moroccan economy.
In accordance with the revival agreement, Sound Energy will provide gas to the pipeline for ten years.