Renergen’s LNG auction garners interest
South African domestic natural gas and helium producer Renergen reported significant interest in the country’s first-ever liquefied natural gas (LNG) auction.
The company said on Wednesday interested parties had until the close of business Friday, August 28, 2020, to register interest in participating in the auction.
The number of registrations has significantly exceeded expectations, demonstrating the inherent demand of the domestic market for alternative energy supplies, the statement reads.
Respondents are finalising non-disclosure agreements, which will allow information sharing to commence and ascertain any specific site-requirements allowing for the switch from other fuels to LNG.
Once the information sharing process has been completed, bidders will have until the end of October to submit their bids for LNG.
Renergen noted it will then assess all bids and allocate accordingly.
“We expected some interest but certainly not the level received, with significantly more companies involved in the auction process than we had forecasted”, said Renergen CEO Stefano Marani.
Renergen is the first South African-based company to supply LNG, and from the domestic supply as opposed to other imported sources.
By 2021, the company aims to complete its Phase 1 expansion plans of the Virginia Gas project and will be producing LNG and helium.
This major milestone will see Renergen become the first distributor of LNG at filling stations (in partnership with Total) in the country and the only domestic producer of helium.
Renergen anticipates that Phase 2 of the Virginia Gas project will be available by 2023. The company expects demand for LNG to increase significantly across South Africa.
Phase 2 production at the Virginia Gas Project will bolster the 2021 Phase 1 production, providing availability of LNG across all major highways in South Africa, with surplus volume to be made available to the market.