14 March 2022
Sound Energy plc
("Sound Energy", the "Company" and together with its subsidiaries the "Group")
Phase 2 Tendrara Development - Pipeline Interconnection Agreement
Sound Energy, the Moroccan focused upstream gas company, announces the entry of a pipeline tie-in agreement to the Gas Maghreb-Europe pipeline (the "GME Pipeline" or the "GME") with ONHYM (Office National des Hydrocarbures et des Mines) in respect of the Phase 2 development of the Tendrara Production Concession (the "Pipeline Tie-in Agreement").
The GME Pipeline, which was transferred to Moroccan state-owned entity ONHYM by the previous operator on 1 November 2021, is owned and operated by ONHYM. Pursuant to the Pipeline Tie-in Agreement, ONHYM has now approved the connection of the Tendrara Production Concession via a gas export spur pipeline to the GME Pipeline.
Under the Pipeline Tie-in Agreement, following the provision of certain technical information by Sound Energy to ONHYM in respect to the Tendrara Production Concession export spur pipeline, and subject to Sound Energy's approval thereafter of ONHYM's proposed technical and financial terms for the construction of the tie-in infrastructure, ONHYM (the acting operator of the GME Pipeline) has committed to put in place the tie-in infrastructure between the Tendrara export pipeline and the GME pipeline, facilitating Tendrara gas to flow to all clients connected to the GME.
The entry of the Pipeline Tie-in Agreement fulfils one of the key remaining conditions to Sound's binding gas sale and purchase agreement (the "GSA") in respect of the Phase 2 development of the Tendrara Production Concession with Morocco's state-owned power Company ONEE (Office National de l'Electricité et de l'Eau Potable) for the sale of natural gas from the Tendrara Concession in Eastern Morocco over a 10 year period, the terms of which were announced by the Company on 30 November 2021.
Following the entry of the Pipeline Tie-in Agreement the GSA remains conditional upon, inter alia: (i) all necessary authorisations and permits having been granted for the construction of the Phase 2 gas installations; and (ii) the final investment decision, when taken, by the Tendrara JV partners, being approved by the Moroccan Ministry of the Energy Transition and Sustainable Development, and the Ministry of Economy and Finance.
Graham Lyon, Sound Energy's Executive Chairman, commented:
"The completion of the tie-in agreement to the GME pipeline marks further progress on the various conditions required to reach final investment decision on the Phase 2 development of the Tendrara production concession. This development is a key element of the roadmap released by the Energy Ministry in August 2021 to supply future Moroccan energy. Sound Energy is addressing the remaining conditions with the many local stakeholders and is working with local and international funding partners to establish project funding. We thank ONHYM for their support in closing out this tie-in agreement."
For further information please contact:
Vigo Consulting - PR Adviser
Tel: 44 (0)20 7390 0230
Graham Lyon, Executive Chairman
Cenkos Securities - Nominated Adviser
Tel: 44 (0)20 7397 8900
SP Angel Corporate Finance LLP
Tel: 44 (0)20 3470 0470
The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.