Rabat - British company Sound Energy has announced the signing of an agreement on the Gas Maghreb-Europe pipeline (GME) with Morocco’s Hydrocarbons and Mines Office (ONHYM).

Sound Energy released a statement saying that the pipeline interconnection agreement covers the second phase of development of the Tendrara project.

Under the agreement, Morocco’s ONHYM approved the connection of the Tendrara Production Concession via a gas export spur pipeline to the Maghreb-Europe pipeline.

Sound energy said that ONHYM, the acting operator of the GME Pipeline,  has committed to set up the tie-in infrastructure between the Tendrara export pipeline and the GME pipeline in order to  facilitate access to Tendrara gas to all clients connected to the GME.

“The entry of the Pipeline Tie-in Agreement fulfills one of the key remaining conditions to Sound's binding gas sale and purchase agreement (the "GSA") in respect of the Phase 2 development of the Tendrara Production Concession with Morocco's state-owned power Company ONEE (Office National de l'Electricité et de l'Eau Potable) for the sale of natural gas from the Tendrara Concession in Eastern Morocco over a 10 year period,” Sound Energy said.

The company emphasized that it has been granted all necessary permits for the construction of the Phase 2 gas installation.

Sound Energy’s Executive Chairman Graham Lyon commented on the  tie-in agreement to the GME, describing it as a further progress on  different conditions to reach final investment decision on the Phase 2 development of the Tendrara production concession.

“This development is a key element of the roadmap released by the Energy Ministry in August 2021 to supply the future Moroccan energy,” he said.

The CEO of the company renewed his company's commitment to addressing the remaining conditions with different local stakeholders.

He said that Sound Energy is working “with local and international funding partners to establish project funding. We thank ONHYM for their support in closing out this ties-in agreement.”

Until October 2021, the Maghreb Europe pipeline had been supplying Spain with Algerian gas through Morocco.

The Algerian government, however, decided to terminate the contract with Morocco, citing alleged “hostility” from Rabat.

The decision also followed the country’s severing diplomatic ties with Morocco.

Morocco and Sound Energy decided to revive the GME amid the termination of the gas pipeline on the heels of tensions between Algiers and Rabat. 

Under the revival deal, Sound Energy will supply the pipeline with gas for a period of 10 years.

After discussing the agreement with the Moroccan government last year, Sound Energy said the gas pipeline include “a fixed unitary price for the annual volume of “0.3 bcm per annum (approximately 29.0 MMscf/d or a minimum amount of energy of approximatively 10.5 million MMbtu per annum to be delivered at the point of sale).”

Welcoming the signing of this week’s Pipeline Interconnection Agreement with Morocco, Sound Energy’s Executive Chairman Lyon said: “This development is a key element of the roadmap released by the Energy Ministry in August 2021 to supply future Moroccan energy. Sound Energy is addressing the remaining conditions with the many local stakeholders and is working with local and international funding partners to establish project funding.”