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Sound Energy PLC on Wednesday said it has an extra 90 days to meet conditions for an agreement that will see the sale of gas from its Phase 2 Tendrara development in eastern Morocco delivered to Morroco's state-owned power company.
Shares in the Moroccan-focused upstream gas company were up 7.2% at 1.56 pence each in London on Wednesday.
Sound Energy agreed to a three-month extension to complete all the conditions of the agreement, which is with Morocco's state owned power company Office National de l'Electricite et de l'Eau potable.
The gas sale & purchase agreement conditions include authorisations and permits for the construction of the Phase 2 gas installations; the final investment decision being approved by the Moroccan government; and an agreement with the operator of the MaghrebEurope gas pipeline.
Although the conditions have not been met yet, Sound Energy said progress has been made in the preparation of pipeline entry agreements, term sheets for financing and approvals.
‘The progress on the various conditions over the last 90 days is encouraging to all particularly the interest of local and international funding partners financing and as such the extension of the agreement of the GSA is welcomed,’ said Chair Graham Lyon.
Sound Energy did not give the exact deadline date for the new extension.
Last November, Sound Energy outlined the terms of the agreement, which will see gas from Tendrara delivered for an annual contractual volume up to 350 million cubic meters of natural gas per year for a period of 10 years, with an annual take or pay volume of 300 million cubic meters. The deal includes a fixed unitary price for the annual gas volume.
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