Gas asset investment company Mahlako Gas Energy (MGE) has concluded its investment in Tetra4, which holds South Africa’s first onshore petroleum production licence.
MGE, which now holds a 5.5% stake in Tetra4, is in a strategic partnership with gas producer Renergen to further diversify South Africa’s sources of primary energy through the production of indigenous natural gas, as well as helium for industrial use.
Through Tetra4 – a Renergen subsidiary – South Africa has joined the ranks of only eight countries in the world to produce liquid helium. Helium is an essential element required in many industries. It is typically recovered as a by-product of natural gas.
The liquid helium produced from the Virginia Gas Plant will be predominantly used for exports to meet global demand, with countries such as the US consuming about 35 000 kg a day of helium.
“Further, this investment aligns seamlessly with the shared vision for a just energy transition during a crucial period of the energy crisis in the country. The project not only enhances domestic energy production, reducing reliance on imports, but also introduces a cleaner energy source to contribute to South Africa's sustainable future,” MGE comments.
MGE is comprised of fund management companies Mahlako Energy Fund and Thirdway Investment Partners Fund I. Both bring significant experience to Tetra4 and are women-led investment teams known for their successful track record in investing in transformative and impactful energy infrastructure projects.
“Our commitment symbolises our dedication to promoting economic transformation and diversity within the energy sector. Together, we embark on a journey towards a cleaner energy future for South Africa,” says Mahlako Energy Fund co-principal Meta Mhlarhi.
South Africa aims to strategically address its long-term capacity needs outlined in the Integrated Resources Plan (IRP) 2023.
“This investment speaks to the IRP's overarching goals of ensuring security of supply, enhancing energy affordability, and actively contributing to carbon emission reductions.
“We are enthusiastic about the opportunities that lie ahead and the positive impact our partnership will have in the energy transition for our country,” says Mahlako Energy Fund co-principal Makole Mupita.
“This investment aligns strongly with the draft IRP 2023 which sees a doubling of the allocation to dispatchable gas to power, which will allow for the introduction of a greater amount of intermittent renewable energy capacity to the network, while reducing the overall carbon intensity of the power generation sector,” she adds.
Meanwhile, the Mahlako Energy Fund is dedicated to taking a prominent role in advancing South Africa's energy security. Guided by the principle that substantial growth hinges on energy, it, with its expanding portfolio and deal pipeline, aims to serve as a catalyst in guiding the energy sector towards a positive trajectory.