Kinetiko in Talks to Supply CBM to South Africa's Gigajoule International

Afro Energy is looking to supply coal bed methane (CBM) to Gigajoule International, a South African natural gas transmission, distribution and trading company.

Australia listed Kinetiko Energy, with its major shareholder in Afro Energy, Badimo Gas, has announced that it has executed a memorandum of cooperation (MOC) with Gigajoule International to investigate and pursue an opportunity for the supply of methane rich gas by Afro Energy from within certain areas on the ER56 tenement at Amersfoort.

The parties intend to undertake a pre-feasibility study under the direction of a working group that shall be established with a representative from both Gigajoule and Afro Energy, Kinetiko said.

“Provided the outcome of the pre-feasibility study is positive and recommendations to proceed with the project are approved by the respective boards of both parties, then both Afro Energy and Gigajoule intend to conclude a gas sales agreement,” the Australian company said.

The agreement is for a period of three years, and may be extended by mutual agreement.

Afro Energy is a joint venture between Kinetiko and South Africa’s Badimo Gas.

Kinetiko has a 49 percent equity in two onshore gas licences covering 1,601km2 in the Amersfoort area of South Africa. Under a farm out agreement with Badimo Gas, Kinetiko is the project operator. Independent oil and gas consultants Gustavson Associates from the USA have estimated for the Amersfoort licences a gas in place (GIP) resource of 2.4tcf and 1.5tcf (2C) Contingent Resources, according to Kinetiko website. 

The Amersfoort area of the Eastern Transvaal coal field between Johannesburg and Durban is one of the most prospective areas for CBM.