Petroleum Africa
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Wednesday, February 10, 2016
Circle Oil and Morocco’s ONHYM have signed a MoU with a potential new gas customer in Morocco, SBS Porcher. The MoU forms the basis for Circle to sell the gas discovered during the successful 2014/15 Sebou drilling campaign and all parties expect to sign binding documentation in the coming months.
As part of this arrangement, a new pipeline extension would be constructed linking the existing Circle-owned pipeline in the northern Kenitra region to the Porcher factory in the central Kenitra area.
Under the terms of the MoU, Porcher would pay for and own the required pipeline extension of approximately 15-18 km to central Kenitra, with construction estimated to start in May 2016 and first gas anticipated to flow during Q4 2016. The estimated gross offtake volume would be approximately 0.35 Mmcf/d with a price of MAD 4.25/cubic meter ($12/mcf). Under the five-year contract the gas price would be fixed with no linkage to oil prices.
This new contract when signed, will result in Circle achieving demonstrably higher gas prices. More importantly it also enables Circle to access a potential new customer base in central Kenitra.
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