Sound Energy reports progress at Tendrara project

Sound Energy updated the market on its operations on Thursday, reporting progress at Tendrara after its wholly-owned Morocco East subsidiary issued a notice to proceed to Italfluid Geoenergy.

The AIM-traded firm said the notice was for the first phase mLNG development of the Tendrara production concession.

Since the notice was issued in mid-February, equipment and service provider Italfluid has confirmed purchase orders for the gas processing and liquefaction packages, as well as the LNG storage tank.

Site preparation activities by Italfluid and Sound Energy at Tendrara had also started, and were ongoing, while Italfluid advanced engineering in line with the project schedule.

Selection of engineering contractors by Sound Energy Morocco East, for flow assurance, flowlines and owner engineering, was said to be nearing completion.

The wellhead servicing scope had been finalised and contractor appointment was progressing, while Sound said it had also awarded a contract to Petroleum Equipment Supply Engineering.

It said the contract was for the scheduled inspection and routine maintenance of the wellhead Christmas tree assemblies on TE-6 and TE-7 - the wells to supply the raw gas to the mLNG facility - with planning now underway for inspection and maintenance.

Over the next six months, Sound Energy said it was targeting the completion of site access road improvements, the placement of purchase orders for and execution of flow assurance, flowlines and owners engineering scopes, and the execution of TE-6 and TE-7 wellhead inspection and servicing.

It would also begin the procurement process for flowline and associated equipment.

Italfluid, meanwhile, would complete preliminary engineering and progress to detailed design, place the remaining purchase orders for equipment, packages and bulks, and complete site preparation and commence civil works.

“We are pleased to announce these updates today following a period of concerted focus on the future strategy of the company,” said executive chairman Graham Lyon.

“The updates highlight the significant progress that Sound Energy has been making to put the key elements in place to create sustained shareholder value through the development of a cash generative, self-financing business centred around society's aspirations, and Sound Energy's strategy to accelerate the energy transition.

“We are on a path to building a quality portfolio that fully reflects our aspiration to be a key player right across the energy transition landscape.”

Lyon said the Tendrara mLNG project was now well underway, and the phase two Development, which would be “significantly greater” in scale, was also moving forward.

“Following the execution of the binding gas sales and purchase agreement with ONEE in November, we have been able to materially advance financing discussions and I am pleased that not only do we have strong interest from established international service providers but also from a number of Moroccan banks, which underscores the potential and strategic significance of this nationally important Moroccan gas development project.

“Strategically, I am pleased with the progress we are making to deliver growth on the current portfolio but also in identifying and maturing a funnel of transition energy and renewable power opportunities that all have the potential to offer attractive returns for the company whilst playing an important role in strengthening energy security of supply and decarbonisation.

“I am particularly pleased that we have been able to do so within an embedded culture of capital discipline which has only been possible through the commitment, focus, abilities and energy of our team”

At 1320 BST, shares in Sound Energy were up 12.89% at 2.15p.