US provides $40 million for gas project in Free State

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The US government’s Overseas Private Investment Corporation (OPIC) on Thursday announced that it had signed a US$40 million loan agreement with South African liquefied natural gas and helium producer Renergen at Virginia in the Free State.

The agreement, signed on Tuesday 20 August with OPIC, provides Renergen access to the capital required to construct the first phase of the Virginia Gas Project in the Free State province in South Africa, which aims to contribute to global helium supplies in light of forecasted supply shortages.

In addition to the development and commercialisation of methane and helium fields, the project also includes the construction and operation of a gas gathering pipeline system and a new liquefied natural gas and helium liquefaction plant.

The Virginia Gas Project will also employ South Africans, contributing to the US government priority of investing in South Africa’s economic growth and addressing unemployment in the country.

Commenting on the agreement, which has a 12 year-term, Renergen CEO Stefano Marani said: “We are extremely proud to be working with OPIC as our financial partners and we look forward to developing the project together as we ascertain the full extent of the amount of helium that could be produced during a time of severe supply constraint.”

Having executed the final binding agreement, Renergen will receive OPIC’s first loan disbursement in the coming days. With financing in hand, Renergen will now focus on the commencement of project activities.

US Embassy Chargé d’Affaires Jessye Lapenn said: “The United States, through innovative development finance agreements like this exciting partnership between OPIC and Renergen, is supporting economic development in South Africa, with the private sector in the lead, and working to expand trade and commercial ties between our countries”.

African News Agency (ANA)