Petroleum Africa
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Monday, September 4, 2017
Sound Energy provided an update on the funding which will be required to develop its existing discovery in Eastern Morocco. Further to receipt of a non-binding expression of interest from Oil & Gas Investment Fund (OGIF) in July 2016 in relation to OGIF’s interest in funding, building and operating a new pipeline connecting the Tendrara Permit to the Gazoduc Maghreb Europe (GME) pipeline, Soundrevealed it has now received an indicative non-binding commercial proposal from Advisory &Finance Group Investment Bank (AFG).
AFG is a Morocco-based financial institution which acts as fund manager to OGIF, its partner in Morocco. The Indicative Proposal is provided by AFG on behalf of a range of institutions, including shareholders of OGIF.
The Indicative Proposal, subject to agreement of terms and contract, is for the provision of funding for the construction of the Tendrara Gas Export Pipeline (TGEP) connecting Tendrara to the GME pipeline of between $60 million and $100 million. The company currently estimates the gross capital cost of the TGEP pipeline to be approximately $60 million for a 12-inch pipeline and $100 million for a 20-inch pipeline.
The TGEP is a critical part of the infrastructure which will be required to support the commercialization of gas from Tendrara by connecting the proposed Tendrara processing facilities to the GME pipeline. Connection to the GME pipeline and therefore to the Moroccan and Southern European gas markets, would support Sound Energy’s strategy to access infrastructure connected to growing domestic and international gas markets.
The Indicative Proposal from AFG also confirms that AFG has been advised that a subset of the institutions may also be willing to fund the planned Tendrara upstream processing facilities.
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