Chariot Ltd has has signed a heads of terms agreement with Vivo Energy Ltd.
The Africa-focused transitional energy group said the agreement relates to future natural gas offtake from the Loukos onshore licence in Morocco, in which Chariot holds a 75% interest as operator.
Chariot will sell volumes of up to 3 million standard cubic feet per day to the midstream business under a long-term gas sales agreement from the potential future production from Loukos.
In addition, Vivo will design, fund, construct, and operate a CNG plant and virtual distribution network to transport the gas across Morocco.
This midstream CNG business would be operated through a special purpose vehicle in which Chariot can acquire 49% interest.
Chariot Morocco Managing Director Pierre Raillard said: ‘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.
‘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 shares were up 2.2% to 7.55 each in London on Monday afternoon.
Source: Natural Gas World