Australia’s Kinetiko Energy, operating through its subsidiary Afro Energy, has entered into a non-binding term sheet with the Industrial Development Corporation of South Africa (IDC). This strategic collaboration aims to jointly develop what is being touted as South Africa’s most extensive onshore liquefied natural gas (LNG) project.
The agreement outlines the establishment of a joint venture between the two entities. This collaboration’s core objective is to appraise and produce LNG, with an initial target of delivering 50 MW of gas-equivalent energy. This capacity will subsequently be scaled up to a substantial 500 MW of gas-equivalent energy.
The project includes Block 1 and further blocks. Block 1 involves a 50 MW-equivalent LNG-size operation for the commercial advancement of onshore wells.
Kinetiko said that the upstream and midstream activities for natural gas development in Block 1 could cost about A$138 million ($88.6 million).
In the future phase, additional on-shore natural gas wells are planned to be developed for the balance of gas for 450 MW-equivalent LNG-size operations.
In a press statement, Kinetiko said: “The IDC has been granted the option to participate in the co-development of further 1,000 MW LNG gas equivalent projects, totaling 1.5 GW.”
Kinetiko expects Block 1 to be developed within a span of two to three years, while the second stage will be developed over a period of nine to ten years.
Kinetiko CEO Nick de Blocq said: “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, and affordable energy.
“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 minimize red tape.”
Kinetiko said the term sheet supports its goals to unlock more than two trillion cubic feet of gas reserves.
