The first phase of the project involves development of a 50MW-equivalent LNG size operation. Credit: Anita starzycka from Pixabay.

Australia’s Kinetiko Energy, through its subsidiary Afro Energy, has signed a non-binding term sheet with the Industrial Development Corporation of South Africa (IDC) to jointly develop what it claims to be South Africa’s largest onshore liquefied natural gas (LNG) project.

Under the terms sheet, the two parties will form a joint venture for the appraisal and production of LNG with the goal of providing 50MW gas-equivalent energy initially. This will later be expanded to a gas-equivalent energy capacity of 500MW.

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The project includes Block 1 and further blocks. Block 1 involves a 50MW-equivalent LNG-size operation for the commercial advancement of onshore wells.

Kinetiko said that the upstream and midstream activities for natural gas development in Block 1 could cost about A$138m ($88.6m).

Under the future phase, additional on-shore natural gas wells are planned to be developed, for the balance of gas for 450MW-equivalent LNG size operations.

In a press statement, Kinetiko said: “The IDC has been granted the option to participate in the co-development of further 1,000MW LNG gas equivalent projects, totalling 1.5GW.”

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Kinetiko expects the Block 1 to be developed within a span of two-three years while the second stage to be developed over a period of nine to ten years.

Kinetiko CEO Nick de Blocq said: “This is a step change in the scale of the Company’s development and represents a national project to support South Africa’s transition to cleaner, reliable, affordable energy.

“The project has been registered under the Strategic Infrastructural Projects management mechanism that operates from the Office of the President. This is expected to expedite all State and Government-related processes in terms of permitting and licensing and minimising of red-tape.”

Kinetiko said the term sheet supports its goals to unlock more than two trillion cubic feet in gas reserves.