‘This needs to signal the start of South Africa’s gas economy’

First South African commercial gas project comes online

Renergen CEO Stefano Marani on its R1 billion investment from the Central Energy Fund.

SIMON BROWN: I’m chatting now with Stefano Marani, CEO of Renergen. A disclaimer, I hold shares in Renergen. Stefano, I want to touch on the R1 billion that you kind of raised yesterday; there are some Ts & Cs. Before I do, phase one [of the Virginia Gas Project] – you were out there, what was it, already six, eight weeks ago, I suppose – must be close to being commissioned now?

STEFANO MARANI: It’s just a few weeks away, and it’s impressive to see. Literally, now every single time that we go down, whether it’s five, six days a week or two weeks apart, you notice a visible change to the plant.

SIMON BROWN: So stuff is properly happening there. Let’s move to capital. It’s no secret that you need a fair chunk of cash for phase two, which is markedly bigger. At the president’s investment conference last week you said that you were going to [need] about R14 billion. You announced yesterday a billion from the Central Energy Fund. You announced just recently Ivanhoe Mines taking a stake in the business as well. It’s moving along. You are on track, I suppose in a sense. You’re starting to raise that cash and get proper money to make phase two happen?

STEFANO MARANI: Look, this process probably started in September last year, just after we announced the update in the reserves. So now we’re starting to see the fruits of all of that labour coming to fruition. I’ll be honest; compared to raising the capital for the first plant the first time around, it’s been significantly easier, also not without pointing out the obvious – that we’ve had some phenomenal tailwinds the last few weeks.

SIMON BROWN: Absolutely. The helium story just gets more and more weird almost sort of by the week to your point. You did that initial LNG [liquefied natural gas], which was a really, really small proof of concept, then the phase one. That was always a sense of de-risking, and I suppose proving to the world that the reserves are there – and certainly they are – and that you and your team can execute on this.

STEFANO MARANI: Yes. Look, there are always nay-sayers. I know for a fact that there are one or two geologists who are still running around saying that there’s actually no gas in the Free State at all. It’s like, really, have you seen any of the wells? But there are always going to be nay-sayers and, and it’s been a rite of passage. I think the most important thing over here is this needs to signal the start of South Africa’s gas economy. Look what it did to the US economy just after the financial crisis. We need that kind of tailwind for the country, and we believe that this is a good catalyst.

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