UK operator Sound Energy is progressing its plans for a micro liquefied natural gas (mLNG) project on the Tendrara concession onshore Morocco.

Sound has entered into a letter of exclusivity (LoE) with Italfluid Geoenergy with the aim of negotiating and entering into a binding contract whereby Italfluid would design, construct, commission, operate and maintain the mLNG plant.

The mLNG Plant, which will also treat and process raw gas from the TE-5 Horst field (phase one development) prior to liquefaction, is a substantial part of the surface facilities required to be built and operated as part of this phase.

Under the LoE, Italfluid and Sound have until 31 March 2021 to conclude their negotiations and enter into a project contract.

The intention is that Sound would pay an initial $5 million for the liquefaction facility, a further $2 million when the project is commissioned – including production build-up - and then make daily rental payments over the initial five-year project term.

Each day that the mLNG plant delivers its guaranteed volumes, Sound would stump up $36,000 to the Italian contractor.

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Italfluid’s key contract is also subject to approval from the Tendrara joint venture partners and the final investment decision being take on the Phase one development project.

This project will serve as a precursor to a full-field development plan that would see a 120-kilometre export pipeline to be developed over the longer term.