Chariot Ltd (AIM:CHAR, OTC:OIGLF) has signed a gas commercialisation agreement with Vivo Energy for the future offtake from the Loukos field in Morocco.
It sees Chariot selling initial volumes of up to 3 million standard cubic feet per day (mmscfd) to a Vivo midstream compressed natural gas (CNG) business.
Vivo will design, fund, construct, and operate a natural gas distribution network to transport gas from various sources to customers across Morocco.
The CNG business will be operated through a special-purpose vehicle, in which Chariot can hold up to a 49% interest.
“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,” Pierre Raillard, Chariot’s managing director for Morocco, said in a statement.
“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.
He added: “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, meanwhile, added: “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 by Moroccan industrial stakeholders."