Renergen to offload 10% stake in Virginia gas project
Renergen plans to sell 10% of subsidiary company Tetra4, owner of the Virginia gas project, to South Africa’s Central Energy Fund for $68mn, it said on March 28.
The companies have signed a term sheet, which if binding agreements are executed within the stipulated time period, will see the Central Energy Fund take a 10% stake in Tetra4. If binding contracts have not been executed after 141 days, the purchase price shall be renegotiated, Renergen said.
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The proceeds from the deal will be used to progress the development of the second phase of the Virginia gas project by Renergen. “The transaction will introduce state participation into the Virginia gas project, which will strengthen Renergen’s strategic position locally as a domestic energy producer and broaden the positive relationship Renergen enjoys with the South African government at all levels,” the company said.
The Virginia gas project, 250 km southwest of Johannesburg, will produce both LNG and helium, using gas from local fields. The main customer base for the LNG is expected to be logistics companies operating trucks along the country's main highways.