Chariot, Vivo pen heads of terms for gas offtake from Loukos licence in Morocco
Africa-focused energy company Chariot has signed a heads of terms agreement with pan-African fuel retailer Vivo Energy regarding future natural gas offtake from the Loukos Onshore licence in Morocco, the companies said on June 24.
The aim of the agreement is to set out the next steps for implementing a gas-to-industry business through the commercialisation of domestic gas and the creation of a midstream compressed natural gas (CNG) partnership to supply Morocco’s industrial energy needs.
Chariot intends to sell initial volumes of up to 3mn m³/day to the midstream CNG business under a long-term gas sales agreement from potential future production from Loukos. Additionally, Vivo Energy intends to design, fund, construct, and operate a CNG plant and virtual distribution network to transport natural gas from a number of sources to existing and new industrial customers in Morocco. The midstream CNG business would be operated through a special purpose vehicle (SPV) in which Chariot can participate with up to a 49% interest.
Chariot is the operator of Loukos and, having recently completed its first drilling campaign on the licence, is now planning flow test operations at the OBA-1 well. Loukos contains further gas resources in existing undeveloped gas discoveries.
“This agreement sets out a path where we can look to rapidly commercialise future production from Loukos, potentially unlocking the development of pre-existing gas discoveries as well as the OBA-1 well and enabling organic growth through future exploration,” commented Pierre Raillard, Chariot Morocco managing director.
The parties will now look to advance the gas offtake, midstream and other related agreements. Chariot secured the agreement for the Loukos licence in August last year, covering an approximate area of 1,371 km2. The Loukos licence is positioned adjacent to Chariot’s Lixus and Rissana offshore licences, with the former housing the Anchois gas discovery and development project.
Chariot holds a 75% interest in the project while the Moroccan state-owned ONHYM retains a 25% stake.