Page 8 - AfrOil Week 13 2022
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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)



       P8                                       www. NEWSBASE .com                         Week 13   30•March•2022
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