Afro Energy, a subsidiary of Australian-based gas company, Kinetiko Energy, and South African development finance institution, the Industrial Development Corporation (IDC), have finalized a joint development agreement (JDA) to co-invest in the exploration and production of gas at nearly 20 wells in Amersfoort located in South Africa’s Mpumalanga province.
Under the terms of the JDA, development and investment will be rolled-out through a special purpose vehicle, namely, the Afro Gas Development SA (AGDSA). In the AGDSA project, the IDC will invest R70 million, representing a 45% stake, while Afro Energy will invest R85 million, representing a 55% stake, to explore and initiate production of up to 500 million standard cubic feet of gas per annum in the southern African region.
With a five-spot well cluster already drilled, the AGDSA project is being implemented in phases with the first including the development of 10 wells as well as constructing a gas terminal that will comprise a treatment and processing plant, a metering station and a pipeline gathering system. Phase two will include kickstarting the production of gas from the 10 wells, drilling an additional 10 wells, as well as expanding the terminal systems stipulated for development in the first phase of the projects.
The project will benefit from Afro Energy’s extensive technical and operational experience in gas exploration, production and infrastructure maintenance.
Executive Chairperson at Kinetiko Energy, Adam Sierakowski, said the partnership with IDC “…represents the first investment in Kinetiko by a substantial South African institution and will fast track the company’s ambitions to rapidly develop numerous gas fields over the vast gassy geology identified,” adding that the investment moves Kinetiko Energy a step closer to its “…vision of becoming a major player in South African onshore gas production.”