Africa Energy sees first output from South Africa's largest gas field by 2033
CAPE TOWN, June 10 (Reuters) - Canada-listed Africa Energy Corp (AFE.V), opens new tab is aiming to start production from South Africa's largest gas discovery by 2033, its CEO said on Tuesday, as it forges ahead with a project former operator TotalEnergies walked away from.
The company is awaiting regulatory approval for a reworked environmental authorisation to survey Block 11B/12B off South Africa's southern coast.
Using domestic gas is a key part of South Africa's strategy to diversify away from coal-fired power generation, with a flurry of new projects being pursued including the country's first liquefied natural gas import terminal along the east coast.
"Our 11B/12B indigenous gas should be very competitive versus imported LNG," Robert Nicolella said from the Africa Energy offices in Cape Town.
Nicolella said the company was studying various ways to market the gas, although its preference is to supply a gas-to-power plant. South Africa is targeting 6,000 megawatts of new gas power projects.
The CEO said Africa Energy is currently in talks with former national oil company PetroSA to use some of its infrastructure to land gas from the Brulpadda and Luiperd fields at Mossel Bay.
TotalEnergies first mooted using PetroSA's infrastructure, which includes the FA offshore platform in Block 9, to help accelerate production.
The idea was to connect Block 11B/12B to existing subsea pipelines that run to the FA platform and from there onwards to Mossel Bay.
"It could be a commercial alternative. It's an option, without a doubt," Nicolella said of using PetroSA infrastructure.
Africa Energy's majority-owned local subsidiary Main Street 1549 was left as operator of Block 11B/12B after TotalEnergies (TTEF.PA), opens new tab and joint venture partners QatarEnergy [RIC:RIC:QATPE.UL] and Canadian Natural Resources (CNQ.TO), opens new tab decided to leave the project last year.
Announcing its withdrawal last July, TotalEnergies said it appeared to be "too challenging to economically develop" and monetize the gas discoveries for the domestic market, without elaborating.
Main Street will hold a 75% participating interest in the block and Arostyle Investments the remainder, according to Africa Energy Corp's website.
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Shell previously contemplated such a move to boost its share value, though it appears to have abandoned the idea. Ultimately, it is very likely that the Senate would push to modify Section 899 or limit its scope, given the potential far-reaching impact on many sectors. But barring a radical change, Section 899 poses a huge risk for European oil and gas giants that are heavily dependent on the United States. Achieving the Trump administration's energy dominance agenda will almost certainly require more foreign investment, not less, so if the CEOs of European energy companies complain loudly enough, the president may well listen to them. The opinions expressed here are those of the author, a columnist for Reuters Enjoying this column? Check out Reuters Open Interest (ROI), opens new tab, your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis. Markets are moving faster than ever. ROI, opens new tab can help you keep up. 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