Sandile Nogxina, director-general, DME
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SA govt, partners in $10bn methane project
Allan Seccombe
Posted: Thu, 13 Dec 2007

[miningmx.com] -- THE South African government’s Central Energy Fund (CEF) has entered an R67bn joint venture with NT Energy Africa Group to search for coal-bed methane deposits to give the country a new energy source.

NT Energy Africa is made up of Bataung Strategic Investments and NT Energy plc, a subsidiary of Sandhaven Resources.

“This initiative will help us achieve one of our key objectives of ensuring security of energy supply in South Africa and it also demonstrates the benefits of private/public sector partnerships where the achievement of such crucial goals are concerned,” said Sandile Nogxina, director general of the Department of Minerals and Energy.

The $10bn stems from projects that could arise from a $100m exploration programme of a number of South African coal fields outside existing mining areas. The projects include gas to liquid fuel using state-owned PetroSA, which is currently sourcing gas from tired gas fields off the east coast, or supplying gas to converted power plants that could generate a third of their electricity using gas, said Chris Mumby from NT Energy.

Bataung is loaded with former and current government officials. The group is headed by the government’s former chief of protocol Billy Modise and has amongst its shareholders Ronnie Mamoepa, the foreign affairs ministry spokesman.

Bataung recently bought a 40% stake in the South African division of a FIFA-accredited Italian stadium seating company called Venelli Seating ahead of the 2010 World Cup to be hosted by South Africa.

Bataung has been granted prospecting rights over quarter of a million hectares in South Africa’s three key coal provinces.

NT Energy Africa and CEF have formed a company called GasCo, which will spend $10bn or R67bn (at the current exchange rate) over the next three years to find methane deposits. There were no details in the press release of where the funding would come from and what each party would contribute.

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The CEF is controlled by the mines and energy minister. Amongst the terms governing the CEF are the requirements that it finance and promote the acquisition and exploitation of coal deposits and manufacture liquid fuel.

NT Energy Africa has drilled coal deposits in the Free State province, recording 350 coal intercepts over 50,000 hectares. Drilling has started in Mpumalanga province and will begin in Limpopo province next year, said Kinesh Pather, Bataung’s managing director.

“The development of sustainable sources of alternative energy has become a strategic priority for South Africa, and coal bed methane and the conversion of gas to liquid fuels provide a real, clean and long-term alternative to the current energy mix,” Pather said.

NT Energy Plc is 54.4% owned by Sandhaven Securities, a wholly owned subsidiary of Sandhaven Resources, an Ireland-registered company. NT Energy Plc plans to list on London's AIM.

Sandhaven specialises in the extraction and sale of natural gas from "basin centred depositional geology", according to its website.

NT Energy has oil and gas rights in the United States and coal-bed methane deposits in South Africa.