Central Energy Fund to invest R1 billion in Free State gas project

The Virginia Gas Project has the only license for onshore petroleum production in the country.

The Central Energy Fund (CEF) will invest R1 billion in Renergen’s Virginia Gas Project, and will help fund the second phase of project development.

The state-owned entity has signed a term sheet to invest the funds in exchange for a 10% state in the project owned by Renergen, an emerging gas producer listed on the Johannesburg and Australian stock exchanges.

Proceeds from the deal will be used to advance the development of the second phase of the project. The deal follows a week after Renergen announced it had entered into a strategic partnership with Ivanhoe Mines in which the Canadian miner could eventually take over more than half of the company.

The Virginia Gas Project holds the first and only onshore petroleum production law in South Africa.

Phase one of the project is in an advanced stage with commercial production of both Liquiified Natural Gas (LNG) and Helium is expected to start next month.

Helium has commercial, medical and industrial uses and is a short supply worldwide. Renergen’s Virginia project holds some of the richest concentrations of gas recorded worldwide.

The CEF Group is actively seeking investment opportunities to fulfill its mandate to contribute to South Africa’s energy security.

The CEF and Renergen have signed a non-binding term sheet for the SOE to obtain 10% of Tetra4, the subsidiary of Renergen and the 100% owner of the Virginia project.

The deal is subject to a number of conditions and the parties have 141 days to execute binding agreements. If binding contracts are not executed within this time frame, Renergen said the purchase price will be renegotiated in good faith.

Stefano Marani, CEO of Renergen, said that the company’s relationship with the CEF goes back many years and that the investment terms are the result of long-term discussions between the two.

“Renergen has successfully grown Virginia on a large scale, marked by the growth of both our helium and methane reserves, which have finally reached the critical mass to enjoy CEF’s involvement,” he said. “To sign CEF and Ivanhoe Mines in the space of two weeks as major investors and strategic partners marks the company’s significant growth and the critical role that Virginia will play in the future supply of clean energy such as helium. “

CEF Group CEO Ishmael Poolo said SOE’s participation in the Renergen project is in line with a newly adopted strategy to be a strategic investor in the energy value chain, and the energy security and equitable transition program for Southern To lead Africa.

Central Energy Fund to invest R1 billion in Free State gas project

Source link Central Energy Fund to invest R1 billion in Free State gas project

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