Free State public transport set for conversion to natural gas
Buses and taxis in the Free State area could soon be powered by gas. The Industrial Development Corporation is at the forefront of a revolutionary project to convert a limited number of buses and taxis in the province to hybrid gas and liquid fuel provided by Tetra 4. The company is funded by the IDC to develop gas fields in the Free State and later Mpumalanga, a deal signed in May. The approved project funds stand at R218m, which will be drawn down over the next two years in line with the construction period.
Tetra 4 produces natural gas and turns it into compressed natural gas (CNG), which is a fossil fuel substitute for petrol, diesel and liquefied petroleum gas (LPG). Tetra 4 will, together with Afrox, commercialise the 187,000ha Free State helium and natural gas field in Virginia, near Welkom, which has proven reserves of 36-billion cubic feet of natural gas and helium.
The Tetra 4 project is the first onshore petroleum and natural gas right in South Africa, and will be capable of supplying helium to numerous specialised and industrial markets. A subsidiary of JSE-listed alternative energy company Renergen, Tetra4 will extract the gas and separate the helium from the natural gas. Compressed natural gas, CH4, will be supplied for use as a “green” fuel.
AGREEMENT
The company has an agreement with bus companies to supply them with CNG as well as gas retailers, who will then supply minibus taxis with gas. The buses and taxis have been converted to hybrid models due to limited gas supply outlets.
Tetra 4 also has an agreement with a gold mining company to convert its diesel locomotives to run on CNG.
Funding from the IDC is for construction of the first phase of pipelines that will link 13 wells to a central compressor station and dispenser. Once fully developed, the operation will link 26 gas wells through 500km of pipeline.
“The funding of Tetra 4 is in line with the IDC’s strategy to promote gas usage in the country, particularly through exploitation of indigenous gas resources,” says Hilton Lazarus, head of the basic and speciality chemicals strategic business unit at the IDC. Lazarus notes that the project will also help create about 15 new permanent jobs as well as about 80 construction jobs in an area with high unemployment.
In addition to the current 187,000 hectares, Tetra 4 has access to a further 92,000 hectares in Virginia, as well as another 52,000 hectares in Evander, Mpumalanga. These can be developed later as demand for the gas improves.
“We’re on track to develop the exciting growth potential of our Virginia Project at Tetra4 and welcome this important funding support from the IDC as we proceed to full production,” said Stefano Marani, CEO of Renergen.
The gas fields have an above average production of helium.
The helium will be marketed by Afrox to industrial users and will be taken up through an offtake agreement with Afrox parent Linde Group, and with providers of the extractive technology used in the operation.