The Industrial Development Corporation of South Africa (IDC) has advanced R16.3 million out of its larger R70 million commitment towards its joint venture with Afro Energy – a subsidiary of Australian gas explorer Kinetiko Energy.
The funding will be directed towards the development of a gas field, whereby gas produced will be utilized for industrial, commercial, transportation and power generation purposes.
The field will be developed in two phases, with the first phase comprising the development of approximately 10 wells as well as the construction of a gas terminal with a gas treatment and processing plant, metering station and pipeline gathering system. The second phase will see the commencement of production from existing wells as well as the development of an additional 10 wells.
Commenting on the funding commitment, Kinetiko CEO Nick de Blocq stated that, "The involvement of the IDC in our project at an asset level is a manifestation of the government's confidence in the viability of our transition energy vision."
The project will be executed at a total cost of R155 million, of which the IDC will provide 45% (R70 million) and Afro Energy will provide 55% (R85 million). Currently, Afro Energy has completed a joint development agreement and associated contracts to jointly develop commercial gas production.
"Our current intention is to focus the joint venture we have created with the IDC on the development of producing fields in the southern part of Block ER271, for which we have begun the process of converting to a multi-decade Production Right. With the ability, via this agreement, to expand the IDC's interest in our production plans going forward beyond this initial LNG development phase, the joint venture has become a launch pad to much larger field development," de Blocq added.
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