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Renergen strikes gold with gas

The alternative and renewable energy business will be ‘the very first upstream player to produce LNG in the private sector,’ explains CEO Stefano Marani.
Stefano Marani says Renergen is ready to begin construction of a reticulation network in the Free State. Picture: Moneyweb

WARREN THOMPSON:  This week Renergen announced interim results for the six months that were largely immaterial because the company is very much in development mode. Here to talk to me about what is happening in the Free State, in particular, is its CEO Stefano Marani. Good evening. Stefano.

STEFANO MARANI:  Good evening, Warren, to you and your listeners. Thank you for making the time for me.

WARREN THOMPSON:  You are obviously obligated to announce interim results, according to the rules of the JSE, but I think the more interesting development is around the onshore petroleum right that the company now has, which has allowed it now to develop the gas field that you own in the Free State. Won’t you take us through that and let us know exactly what’s going to be happening in the next few months?

STEFANO MARANI:  Yes, absolutely. Just to be clear, on the interims it is just good governance to let everyone know what’s happening from a financial position.

But where we stand at the moment from the environmental perspective is that on September 29 we were granted an environmental impact assessment approval. This grants us the ability to now move forward on the construction of a reticulation network. This is something that we’ve been working on for the last two years, so a lot of effort has gone into it.

What this means from a company perspective is that we are now in a position to be able to construct this reticulation network. The reticulation network then allows us to move all of the gas from the wells, which is decentralised, to one centralised point. And then from there the next exciting part of the announcement was the fact that we are moving to a system of liquefaction – i.e. we are going to turn this methane into LNG [liquefied natural gas], and become among the first sellers and producers and distributors of LNG in South Africa. Hence this is really a landmark for South Africa, being the very first upstream player to produce LNG in the private sector.

WARREN THOMPSON:  Very briefly, that liquefication means that you can transport this fuel over much greater distances, obviously including reaching a major energy market like Gauteng.

STEFANO MARANI:  Absolutely. Well, with CNG [compressed natural gas] Gauteng was within our reach, but now Cape Town is within our reach as well. Just to give you an idea of the kind of metric that we are looking at, we are capable of transporting approximately six to seven times more energy per truckload than we were before. And that obviously contributes towards a serious reduction in the operating cost of delivering the product to your customer.

WARREN THOMPSON:  We are going to have to leave it there. But, Stefano, we’ll be very interested to see how things progress in the future.

STEFANO MARANI:  Thank you.

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