Morocco: Sound Energy finalizes its LNG supply with Afriquia Gaz

Energy transition company Sound Energy has finalized its previously announced LNG sale and purchase agreement with Moroccan LPG distributor Afriquia Gaz.

Sound Energy announced that it has entered into binding conditional agreements for $18 million in loan note financing for the Tendrara LNG development. It also announced that the LNG gas sales agreement is now unconditional. Previously, the company announced the GSA LNG Phase 1 in July.

In satisfying the last major condition precedent of the GSA LNG, Sound Energy has entered into agreements with Afriquia Gas for an $18 million 6% secured loan maturing in December 2033.

The company will be able to spread the charge over a three-year period beginning December 24, 2021.

Interest on the principal amount of the Loan in the fixed amount of 6 percent per annum shall be payable quarterly but deferred and capitalized semiannually until the second anniversary of the execution of the Loan Agreements. Thereafter, the deferred principal and interest shall be payable annually in equal installments commencing seven years from the date of execution of the Loan Agreements.

The conditions precedent to the loan include a project contract with Italfluid for the provision of a gas processing and liquefaction facility related to the Phase 1 development.

Graham Lyon , executive chairman of Sound Energy, said, " We are pleased to have executed all of the loan note documentation which ensures that Sound Energy will be fully funded for its share of the Phase 1 development capital. This is a key milestone for the Company and we will now proceed with the issuance of the Notice to Proceed to Italfluid and draw down the initial loan funding from Afriquia Gas in order to proceed with the execution of the Phase 1 development.