Energy transition company Sound Energy has completed the previously announced LNG sale and purchase agreement with Moroccan LPG distributor Afriquia Gaz.
Sound Energy announced the entry of binding conditional agreements regarding an $18 million Phase 1 Tendrara LNG development loan note financing. It also announced that the LNG gas sales agreement is now unconditional. Previously, the company announced the Phase 1 LNG GSA in July.
In satisfying the final material condition precedent to the LNG GSA, Sound Energy has entered into agreements with Afriquia Gaz in respect of an $18 million 6 per cent secured loan note maturing in December 2033.
The company will be able to draw down the load over a three-year period starting on 24 December 2021.
Interest on the drawn principal of the Loan of a fixed 6 per cent per annum will be payable quarterly but deferred and capitalised semi-annually until the second anniversary of the entry of the loan agreements. Thereafter, principal and deferred interest will be repayable annually in equal installments commencing seven years from the date of execution of the loan agreements.
Conditions precedent to the loan includes a project contract with Italfluid for the provision of a gas processing and liquefaction facility relating to the Phase 1 development.
Graham Lyon , Sound Energy’s executive chairman, said: “ We are delighted to have executed all loan note documentation which ensures that Sound Energy will be fully funded for its share of Phase 1 development capital. This is a key milestone for the Company and we will now move to issuing the Notice to Proceed to Italfluid and drawing down initial funding from the Afriquia Gaz loan in order to proceed with execution of the Phase 1 development.”