South Africa Firm to Sell LNG for Trucks

South Africa-listed Renergen announced May 21 a deal to supply LNG to fuel the distribution trucks of the country’s largest brewer.

It will supply the fuel to South African Breweries (SAB) which will displace diesel use in its fleet. SAB is part of the Belgian global brewing giant Anheuser-Busch InBev.

“The agreement sees the initial roll-out of compressed natural gas [CNG] to a small fleet of trucks in the Gauteng area, using gas from Tetra4’s Virginia operations. This will be upgraded to a significantly larger fleet to run on LNG once Tetra4’s plant reaches operational status in 2019,” said Renergen.

Gas is currently produced by Renergen’s 90%-owned subsidiary Tetra4 at Virginia in Free State province, as a by-product of its liquefied helium production there. But it’s a by-product with value. 

“This is the first and only onshore petroleum production right in South Africa, with a R6.7bn [$525mn] project, which is due to ramp up to full production in 2H 2019,” Renergen said.

“The [SAB] deal starts with a small number of trucks now, to use excess capacity from our existing CNG plant. Then when the LNG plant becomes operational, the number of trucks increases dramatically,” said Renergen CEO Stefano Marani: “Use of LNG not only drastically reduces carbon emissions but has the added advantage of improving the vehicle’s lifecycle maintenance and reduces the operator’s cost significantly.” The LNG will be trucked to SAB by road tankers.

“We have not capped the deal at a specific value, but rather ensured that it will result in financially savings for the customer based on minimums,” said Marani, adding that the hunt is on for other industrial customers for LNG: “We have limited capacity, and it is first come first served.”

(Photo of CNG pump is courtesy of Italy's Snam)