Page 8 - AfrOil Week 13 2022

AfrOil INVESTMENT AfrOil

Renergen to sell 10% of Tetra4 subsidiary

to South Africa’s Central Energy Fund

SOUTH AFRICA RENERGEN (South Africa) revealed on March Ivanhoe announced its partnership with
28 that it had arranged to sell a 10% stake in its Renergen earlier this month, saying that it had
Tetra4 subsidiary, which serves as the operator made an initial equity investment of around
of the Virginia natural gas project, to the state- $13mn in the South African firm in exchange
owned Central Energy Fund (CEF). for about 4.35% of its equity. Under this deal,
In a statement, Renergen explained that it the Canadian firm will also have the right to
had signed a non-binding term sheet with CEF nominate one director to Renergen’s board
on the deal. The document notes that CEF has and acquire up to 25% of that company’s shares
agreed to pay the equivalent of about $69mn through subscription (and at a slightly dis-
for the stake but also stipulates that Renergen counted price) in consideration for cash or its
has the right to renegotiate the price following own equity.
completion of the transaction. It also gives the Additionally, Ivanhoe will be able to acquire
parties 141 days to execute binding agreements another 55% of Renergen’s shares through a
on the sale. second subscription (again, at a slightly dis-
The South African company said it had counted price) for close to $250mn. The South
agreed to work with the state-controlled entity African company will use the proceeds of this
in order to move ahead to the second stage of sale to fund the second phase of the Virginia gas
the Virginia gas project. It also noted that nego- project.
tiations with CEF had come shortly on the heels Renergen aims to launch the first phase of
of an announcement of Renergen’s strategic this project, which encompasses the develop-
partnership deal with Ivanhoe Mines (Canada). ment of natural gas fields near Welkom, Virginia
Stefano Marani, Renergen’s CEO, stressed and Theunissen in Free State, in April 2022. It
this point, saying: “To sign CEF and Ivanhoe has been using gas from these fields to produce
Mines in the space of two weeks as major inves- CNG but is preparing to shift to LNG once the
tors and strategic partners highlights the signifi- first phase of its gas liquefaction plant comes
cant growth of the company and the critical role online. Renergen will send some of the Phase
Virginia will play in the future supply of clean One LNG to its industrial consumers and some
energy as well as in-demand helium.” to a local subsidiary of TotalEnergies (France)
In a separate stock exchange filing, Rener- for use as long-haul trucking fuel.
gen highlighted its long-standing relationship The company aims to bring the LNG plant’s
with the CEF. It also quoted the fund’s CEO, Dr. second stage on stream in 2023 or later. Phase
Ishmael Poolo, as saying: “Our participation in Two will include a helium unit, as the Victoria
the Renergen project is in line with the [fund’s] fields contain unusually high volumes of the
newly adopted strategy of being a strategic inert gas. Sproule, an international energy con-
investor in the energy value chain that is geared sulting firm, estimates that these sites may hold
to support the region’s energy needs, leading the as much as 9.74bn cubic metres of helium, or
energy security and just transition programme more than the total proven reserves of North
for South Africa.” America. ™

Tetra4 is a fully-owned subsidiary of Renergen and the operator of the Virginia Gas Project (Photo: Renergen)

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