HIGHLIGHTS
- Afro Energy, a subsidiary of Kinetiko Energy(1), 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 is estimated to cost approximately A$138M comprising A$90M2 equity and A$48M debt.
- IDC shall equity fund approximately A$52M for 30% JV interest.
- Afro Energy shall equity fund approximately $A38M for 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.
- The second stage intends the parties expand the JV 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 further 1,000MW LNG gas equivalent projects, totalling 1.5GW.
- The Term Sheet underpins the Company’s strategic objectives to unlock over 2TCF in gas reserves and become a sustainable cleaner energy solution for the South African economy.
Kinetiko Energy - developing an energy transition solution for South Africa focused on commercialising advanced shallow conventional gas and coal bed methane projects - has provided the following update on its onshore gas exploration and production development activities.
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 minimising of red-tape. We are beyond delighted to be able to say that our journey towards a large-scale project commercialisation and production has now begun.'
(1) Kinetiko Energy currently holds 49% economic interest in Afro Energy (Pty) Ltd, being the entity which holds the exploration permits.
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Source: Kinetiko Energy
