South Africa’s Central Energy Fund (CEF) will reportedly invest R1-billion ($68-million) to help fund Renergen’s Virginia Gas Project in Free State, South Africa, in order to accelerate the second phase of the project’s development.
According to News24, CEF has signed a term sheet to invest the funds in return for a 10% stake in the project which is owned by Renergen, an emerging gas producer listed on the Johannesburg and Australian stock exchanges. News24 reported that the earnings from the deal will be used to progress the development of the second phase of the project.
The agreement comes after Renergen partnered with Ivanhoe Mines, which according to reports, might acquire more than half of the company. Renergen says that the gas at the Virginia Gas Project in Free State contains one of the richest helium concentrations ever recorded in the world.
“The natural gas is also very pure with an average of over 90% methane, and almost zero higher alkanes, which reduces the complexity of liquefication,” Renergen said about the Virginia Gas Project.
The first phase of the project is at an advanced stage with commercial production of both Liquified Natural Gas (LNG) and Helium is expected to commence next month.
Stefano Marani, CEO of Renergen, said the company has had a solid relationship with CEF for a long time, and the investment commitment results from long-term discussions between the two companies.
“Renergen has successfully grown Virginia in a size and scale, highlighted by the growth both of our helium and methane reserves, which have finally reached the critical mass to enjoy CEF’s involvement,” Marani said.
“To sign CEF and Ivanhoe Mines in the space of two weeks as major investors and strategic partners, highlights the significant growth of the company and the critical role Virginia will play in the future supply of clean energy as well as in-demand helium,” he said.
By Zintle Nkohla
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