The Petroleum Agency of South Africa has granted integrated alternative and renewable energy business Renergen’s Tetra4 subsidiary environmental authorisation for its Free State natural gas development.
The authorisation, the processing of which has taken more than two years and has involved multiple rounds of public participation, was required to further the development of a natural gas resource in the Free State, through the creation of a 107 km pipeline network and associated gas processing facilities.
“The approval is groundbreaking for Renergen. We now enjoy the status of not only having the first onshore petroleum production right in the country, but also the only one with an environmental authorisation to commence full-scale production,” Renergen CEO Stefano Marani noted in a statement released on Monday.
He expressed the company’s excitement at progressing production and unlocking value for shareholders earlier than anticipated.
Tetra4 on Monday further announced that it would become the first local company to produce liquefied natural gas (LNG) in South Africa. It would also be among the first to sell LNG locally.
As a result of significant engineering, Tetra4 will now start construction of natural gas liquefiers early in 2018 with production of LNG to start in early 2019, Marani noted.
The advantages of locally producing and selling LNG include significant financial savings to the end-user, as gas in liquid form allows for efficient, long-range transport. The gas in liquid form also overcomes the challenges of storing compressed natural gas (CNG) in vessels of specified size and weight, as well as the challenges of the high pressures associated with the gas, he stated.
When producing LNG, the liquefaction of gas allows for the condensation of the energy around 625 times its natural state. This form of gas increases the energy density to levels comparable to diesel, which means Tetra4 will now be able to deliver its gas nationally.
“This groundbreaking initiative will see trucks and buses using LNG, supplied by Tetra4, travel up to 2 000 km, compared with the current 500 km,” Marani stated.
He noted that the delivery cost of the gas from the gas field to Cape Town, for example, could be reduced by up to 84%.
Tetra4 is currently supplying Megabus’ bus fleet and several trucks with compressed natural gas from a recently completed natural gas compression station in Virginia, in the Free State.
“Tetra4 is a unique asset with great potential and offers unique opportunities going forward. The asset provides us with first mover advantage and the ability to shape the natural gas landscape in the country,” Marani stated.
The company will, however, continue to supply CNG to applications that do not require significant transport to market or operate on a home base scenario.