S African Renergen Has LNG Green LIght
Renergen, developer of South Africa’s first inland LNG project, welcomed the final regulatory go-ahead October 23, and hopes to begin production in January 2019. The LNG is aimed at transport where its energy density puts it on a par with diesel and far ahead of compressed natural gas.
The alternative and renewable energy business, which is listed on the Johannesburg Stock Exchange, says it received “a positive environmental authorisation or record of decision (RoD) on Tetra4’s Environmental Impact Assessment (EIA) by the Petroleum Agency of South Africa (PASA) on 29 September 2017.”
Tetra4 is a subsidiary of Renergen, and is developing the country’s first LNG production facility, extracting the gas from a gas field in the Free State province, liquefying it and supplying it to customers.
Renergen CEO Stefano Marani told NGW: “Obtaining this EIA, which was favourable, took two years of hard work. This is our permission to proceed. The EIA approval is ground-breaking for Renergen. We now enjoy the status of not only having the first onshore petroleum production right in the country, but the only one with an environmental authorisation to commence full scale production.
“As a result of significant engineering, Tetra4 will now commence construction of natural gas liquefiers early in 2018, with production of LNG to commence early in 2019.”
He said that South Africa has seen calls for less dependence on coal as a source of energy over the years. Lower use of coal will reduce greenhouse gas emissions and less demand will lessen environmental risk in various industries across the country. “By pursuing the production of LNG, Renergen has taken the first step in the development of (this type of) energy in South Africa,” he said.
“This form of gas increases the energy density to levels comparable to diesel, implying Tetra4 can now deliver its gas nationally. This ground-breaking initiative will see trucks and buses using LNG, supplied by Tetra4, which can travel up to 2,000 km – compared with the current 500 km that can be achieved using compressed natural gas, which the new fuel will replace. “The asset provides us with first-mover advantage and the ability to shape the natural gas landscape in the country,” he said.
He said capital to advance the project is being raised through a share placement. Initially it will seek rand 125mn but this figure could go higher if there is an enthusiastic take-up. The project will start at 25 metric tons of output a day, rising to 150 mt over five years. “The infrastructure can accommodate more, and there is room for significant expansion,” said Marani.
“Given the project’s location, the transport industry will be the low-hanging fruit. However, being in the middle of the country, this opens up markets to replace traditional fuel. Factories will become quite attractive customers, and we are talking to them.”
He said that Renergen (90%) and its black economic empowerment partner (10%) own the entire equity in Tetra4, and no further investors are being sought.
John Fraser