Mahlako Gas Energy invests in Renergen's Victoria gas project in SA

Renergen, the South Africa-focused energy company, on December 27 announced a boost to its Victoria gas project with a 550mn rand ($29.8mn) investment from Mahlako Gas Energy Proprietary. The funds will be directed towards Tetra4 Proprietary, a subsidiary of Renergen that owns the Victoria project.

In exchange for the investment, Mahlako Gas Energy will secure a 5.5% equity stake in Tetra4. Part of the proceeds will see the repayment of the Standard Bank bridge loan and marks the beginning of the equity transactions relating to Phase 2, which may include, inter alia, additional transactions at the Tetra4 level combined with a capital raise at the Renergen level, the company said.

Mahlako Gas Energy, the investor in this venture, comprises two entities, Mahlako Energy Fund and Thirdway Investment Partners. 

Renergen recently told GasPathways that it is spearheading the country's transition towards cleaner and more sustainable fuel alternatives. With a focus on LNG, Renergen is working on transforming the country’s transport sector while addressing environmental concerns and promoting economic growth.

The company operates the Virginia Phase 1 liquefaction plant, which was commissioned last year, and produces around 50 tonnes/day of LNG, while Virginia Phase 2 will see this increase to about 680 tonnes/day, or 940,000 diesel liter equivalent/day. Virginia Phase 2 is planned to be operational in 2026. Renergen in June 2022 signed a preliminary agreement for a loan of up to $500mn from the US International Development Finance Corp. for the second phase of the Virginia project. 

The Virginia gas project comprises various gas fields across Welkom, Virginia and Theunissen in South Africa's Free State. Their natural gas is very pure, according to Renergen, with an average methane content of more than 90%, but they also contain some of the richest helium concentrations recorded globally.