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    Kinetiko, Gruner plan to sign gas deal in SA


The companies have signed a letter of intent (LoI) to conclude a gas development and supply agreement in South Africa.

by: Shardul Sharma

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Kinetiko, Gruner plan to sign gas deal in SA

Australia-listed Kinetiko Energy has signed a letter of intent (LoI) with Johannesburg-based Gruner Energy to conclude a gas development and supply agreement in South Africa, Kinetiko said on February 16.

The parties have executed the LoI with the purpose of ultimately negotiating and concluding within six months a formal, binding gas development and supply agreement whereby Kinetiko agrees to explore, drill and extract natural gas within South Africa and Gruner intends to assist in development and purchase such natural gas.


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Kinetiko and Gruner Energy intend to co-fund the development of a proof of concept gas production trial, that if successful can be scaled.

“The co-signing of a letter of intent with an international partner in the mid- and down-stream energy sector, especially one with substantial experience on the continent of Africa, is a step change in our approach to eventual commercial production,” Kinetiko CEO, Nick de Blocq, commented.

“We are targeting the southernmost areas of our Block ER271 for this project due to deeper terminal depths of those wells and the expected concurrent increase in pressures and flow rates. This LoI is but the first in our plans to develop multiple joint ventures with expertise in mid-stream infrastructure groups, who bring a market along with them that is eagerly awaiting our product,” he added.

Kinetiko is focused on advanced shallow conventional gas and coalbed methane (CBM) opportunities in South Africa. It has a large potential exploration area, of which approximately 7000 km2 is granted and being explored.

Kinetiko is also developing the Amersfoort gas-to-power project in South Africa. It is working with South Africa-based Vutomi Energy for the power project. ER271 forms part of the Amersfoort project.