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    Sound extends deadline for Moroccan LNG deal


The parties have until December 17 to satisfy or waive agreed conditions.

by: Joseph Murphy

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Sound extends deadline for Moroccan LNG deal

London-listed Sound Energy announced on December 1 it had agreed an extension to the deadline for concluding an LNG sales deal in Morocco.

The deal will underpin the construction of a micro-sized liquefaction plant at Sound's Tendrara concession. The deadline for satisfying or waiving conditions for the contract signed with Moroccan liquid petroleum gas distributor Afriquia Gaz has been extended to December 17, the company said.

Sound noted it had satisfied all conditions within its control to close the deal. A remaining hurdle is the conclusion of a loan agreement, under which Afriquia will lend Sound $18mn at a 6% coupon rate with a 12-year repayment term.

The company said other conditions to the deal were expected to be waived.

"Much work has been completed in the last month and contracts finalised with Ital Fluids," Sound chairman Graham Lyon said. "We are confident that all conditions precedent to the LNG GSA will be satisfied imminently and consequently the 'notice to proceed' with Phase 1 development can be announced once all contracts are executed." 

The construction of the liquefaction plant represents the first stage of development at the Tendrara concession. Sound announced on November 30 it had reached a deal to sell gas from a larger-scale second stage.