RE:Sou28 Oct 2021 22:22
Part 1
Hydrocarbons: Sound Energy refocuses its gas activities in Morocco
While Algeria ratified yesterday, the de-supply of the Maghreb Europe Gas Pipeline (GME) on the occasion of the visit to Algiers, of the third vice-president of the Spanish executive, Teresa Ribera, the British Sound Energy plans to refocus its gas activities in Morocco.
Also Sound Energy says it is ready to sign a key supply agreement with the state public service, but in return hopes for a rapid conclusion of the tax dispute between it and this same state and which would have led the company to suspend some of his projects. Indeed, this situation has led it, while keeping its most important development plans under review, to go ahead than with the much smaller micro-LNG project and to reduce costs. activities in particular those of explorations.
The tax dispute weighs the wings of Sound Energy for a suitable development
In a recent interview with S&P Global Platts, Sound Energy CEO Graham Lyon said his company, which operates the largest gas discovery ever made in the North African country, was ready to continue work on development at its Tendrara field in eastern Morocco, notably with the signing of a key sales agreement with the state-owned company ONEE. Sound Energy is a partner in Tendrara of the Moroccan public company Office Nationale des Hydrocarbons et des Mines (ONHYM), which is supporting it in its multi-million dollar tax dispute. “ONHYM has been very supportive and recognizes that we are right,” said Lyon, adding that his appeal would be heard from next month. Lyon said he hoped the case would be resolved quickly, but warned it could "drag on," meaning Sound Energy could ease off on Tendrara's future development.
Sound Energy is committed to a final contract for the sale of gas locally
Sound had signed a memorandum of understanding at the end of 2019 to supply 300 million m3 of gas to ONEE from Tendrara, enough to cover about a third of its gas needs. Despite the ongoing tax dispute, Lyon has also said it "intends" to sign "anyway" the final gas sale agreement with ONEE. “Without this trigger, we cannot start the funding,” he said, adding that the initial engineering of the development was complete. In addition, Sound is preparing to invest $ 250 million in the project, including new wells, a gas processing plant and a 120 km secondary pipeline to connect to the GME trunk line. Lyon said there were also important upstream opportunities that could be exploited in eastern Morocco. “We have a lot of exploration potential, maybe 30 different sites where we could consider drilling. If only 10% are successful, we would be able to meet Morocco's national gas demand, ”said Lyon.