Chariot Limited (AIM: CHAR), the Africa-focused transitional energy group, is pleased to announce it has signed a Heads of Terms agreement with Vivo Energy regarding future natural gas offtake from the Loukos Onshore licence (“Loukos”) in Morocco (Chariot, Operator 75%, ONHYM, 25%). The aim of the agreement is to set out the next steps for implementing a gas to industry business through, on one side, commercialisation of domestic gas and, on the other, the creation of a midstream compressed natural gas (“CNG”) partnership to supply Morocco’s growing industrial energy needs.
Chariot is 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 and an attractive exploration portfolio which together offer additional production potential.
Data gathered from the drilling campaign and recently reprocessed 2D and 3D seismic are now being integrated to update the understanding of this resource potential. Vivo Energy, is a market-leading, pan-African retailer and distributor of high-quality fuels and lubricants with a long-standing presence in Morocco’s petroleum products’ sector. Through Vivo Energy Maroc, it operates a network of over 400 service stations, supplying commercial and industrial customers across a number of sectors in the Kingdom.
Key terms of the Agreement:
• Chariot intends to sell initial volumes of up to 3 mmscfd 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; and
• Finally, this midstream CNG business would be operated through a special purpose vehicle (“SPV”) in which Chariot can participate in up to a 49% interest.
The parties will now look to advance the gas offtake, midstream and other related agreements. Whilst there is no guarantee that this will be turned into fully termed documentation, the parties are progressing with this next stage and further updates will be provided as required.
Pierre Raillard, Chariot Morocco Managing Director commented, “We are delighted to extend our collaboration with Vivo Energy into the onshore, which benefits both of us as partners and aims to instigate further development of Morocco’s gas network.
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.
This will be undertaken in coordination with our upstream partner ONHYM with an initial focus on the existing markets. It will also leverage our gas production to support Vivo’s wider development of CNG virtual pipeline infrastructure and, as part of a potential midstream partnership, Chariot could have direct exposure to not only Loukos sales but also gas distribution income in country from a wider pool of sources.” Matthias de Larminat, Vivo Energy Maroc Managing Director, commented, “Natural gas is a key component of the energy equation aimed at decarbonising Morocco, as defined by His Majesty the King. This project fully aligns with this ambition and meets the needs expressed
