Petroleum Africa
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Tuesday, August 22, 2023
Kinetiko Energy subsidiary Afro Energy has executed a non-binding Term Sheet with the Industrial Development Corporation of South Africa (IDC) to co-develop a new joint venture for the appraisal and production of LNG to deliver 50MW growing to 500MW gas equivalent energy.
The first stage 50MW equivalent project in Block 1 is estimated to cost approximately A$138M comprising A$90M2 equity and A$48M debt. The second stage intends the parties expand the joint venture to 500MW LNG gas equivalent, which would be the largest on shore LNG project in South Africa. The IDC intends to fund 30% of the second stage development.
The IDC has been granted the option to participate in the co-development of a further 1,000MW LNG gas equivalent projects, totaling 1.5GW. IDC shall equity fund approximately A$52M for a 30% JV interest while Afro Energy will fund approximately $A38M for a 70% JV interest. Afro Energy has the right to introduce third party investors to the JV for part or all of its 70% interest and can stage payment.
Kinetiko CEO, Nick de Blocq, commented: “This is a step change in the scale of the Company’s development and represents a national project to support South Africa’s transition to cleaner, reliable, affordable energy. I cannot overstate the importance of this massive step we have taken in collaboration with our IDC joint venture partners, as it represents a level of confidence in our project from high layers of Government. The project has been registered under the Strategic Infrastructural Projects management mechanism that operates from the Office of the President. This is expected to expedite all State and Government-related processes in terms of permitting and licensing and minimizing of red-tape. We are beyond delighted to be able to say that our journey towards a large-scale project commercialization and production has now begun.”
The full release can be found on the Kinetiko Energy website here.
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