Kinetiko Energy and the Industrial Development Corporation (IDC) have collaborated to develop a Liquefied Natural Gas (LNG) project near Secunda, South Africa. The project aims to deliver 500MW of gas-powered energy, making it the country’s largest onshore gas project.
- Afro Energy, a subsidiary of Kinetiko, has signed a non-binding term sheet with the IDC to establish a joint venture for the appraisal and production of LNG. The initial phase will deliver 50MW of gas equivalent energy, with plans to expand to 500MW.
- Afro Energy holds the exploration rights for commercial LNG over gas fields near Secunda in Mpumalanga. The area has shown high production rates of gas from boreholes in both the sandstone and coal formations.
- An independent gas reserves and resources report from Sproule B.V has confirmed the economic viability and scalability of the contingent resource, describing it as having “positive economics and enormous scalability.”
- Kinetiko, an Australian-listed company, aims to unlock over 2 trillion cubic feet (tcf) of gas reserves and become a sustainable cleaner energy solution for South Africa. The project aligns with their strategic objectives.
- The estimated cost of the first-stage 50MW-equivalent project is around AUD138 million (R1.67 billion), with the IDC providing approximately AUD52 million for a 30% interest in the joint venture. Afro Energy will contribute around AUD38 million for a 70% interest.
- The second stage of the project aims to expand the joint venture to 500MW of LNG-gas-equivalent, making it the largest onshore LNG project in South Africa. The IDC plans to fund 30% of the second-stage development, and there is an option for further co-development of 1,000MW LNG-gas-equivalent projects.