Kinetiko

EXECUTIVE INSIGHT

South Africa Powering

Kinetiko Energy is launching a project set to change the landscape for the SA energy market

South Africa

Powering

Whether we like it or not, in this day and age, the role of gas as an important resource is unquestionable. In South Africa, a country historically heavily dependent on coal, gas is the preferred, and the only feasible, alternative within the energy transition, affirmed Nick de Blocq, Managing Director of Kinetiko Energy, a company that is launching a project set to change the landscape for the SA energy market.

Kinetiko Energy is an Australian gas explorer focused on advanced shallow conventional gas and coal bed methane opportunities in rapidly developing markets in Southern Africa, a region with extensive gassy coal basins, widespread energy infrastructure and growing gas demand.

Infin Drilling

Infin Drilling is a hands-on driven company, focused on quality, high ethics, integrity, honesty, delivery and backup. Specializing in CBM and the Gas Industry, Infin Drilling can operate across areas all over Africa, therefore meeting clients’ needs for their drilling requirements.

Entering the Coal Bed Methane sector in 2012 con tracting to Kinetiko Energy enabled Infin Drilling to participate in drilling Production Perm test wells and NQ3 core exploration holes. Scope of work included drilling through very difficult broken/running dolerite forma tions where we gained valuable experience and knowledge including procedures, health, environmental and safety standards, which is our main ethos when working with any organization.

With our long-standing experience, we have been able to design and manufacture our own drilling rigs and

associated supporting equipment to suit project/client demands. Our range of industry-leading equipment and services includes a 50-ton pull-back multi-purpose CBM drill rig which is capable of Coring, DTH and Tri Cone. Our Core rigs have an onboard 3000lt water tank and drill rod storage and drilling technique which doesn’t require digging mud sumps but uses aboveground sumps limiting environmental damage in wet lands and rocky areas.

We also provide the following product services, TwoStage Booster – single stage 3600 SCFM – two stage 2700 SCFM, Compressors which are – 1100 SCFM – 25 Bar and 7” BOP & Washington Rotating Head.

Rupert and Andre successfully completed the Boots & Coots IADC Well Control Supervisory Level Accredi tation Program in Houston Texas – in April 2013.

In terms of size, we have granted exploration rights for over 6,000 square kilometres

The company is currently progressing its flagship Amersfoort Gas Project, located at the heart of South Africa’s energy, mining and transport infrastructure and close to the major population centres of Johannesburg and Tshwane (Pretoria).

One of a kind Exploration programmes already conducted have proven the existence of large accumulations of on-shore, shallow gas with strong flow rates, demonstrating the potential to develop into significant gas production fields. Gas has been identified in every exploration hole drilled to date. These efforts are being led by South-Africa born Nick de Blocq, an industry professional with over 34 years of experience in the oil and gas sector, who has held various senior roles for prime companies including Schlumberger. Having worked in about 60 countries, his knowledge of the entire drilling industry and its support mechanisms, both off- and onshore, is extensive and his knowledge of how to get new wells into production is his speciality.

He explains that the Amersfoort Gas Project is special due to its geographical size as well as

Infin Drilling’s goal is

To become the leading landbased gas exploration company in Africa. We offer the best hands on management, highest standard of work and no compromise with Health &Safety. We wish Kinetiko and their team, further success in their African operational developments.

www.infin.co.za

Gas Exploration Services

its geology, which makes gas production achievable in the short term. “The geology is unique in terms of its compartmentalization. Every single one of the boreholes that we’ve drilled so far, has cut gas. Not many companies can say that they have a 100% strike rate. This is quite a differentiator.”

“In terms of size, we have granted exploration rights for over 6,000 square kilometres, which provides massive potential exploration upside and value proposition,” he affirms, adding that the average depth of all holes drilled ranges from 430 to 650 meters, which is another advantage, as there is no need for hydraulic fracturing. The shallow depths for drilling of exploration and production wells is a main driver for keeping costs low and thus strengthening the project economics.

Four pillars

Although the company ventured into South Africa some 12 years ago, redrilling only started last year. Mr de Blocq explains that the efforts are currently centred around proving the productivity of the multiple fields within the company’s rights areas.

“In Q4 last year, we drilled three development wells, which are called the Korhaan cluster, to add to two existing wells creating a five-spot cluster. This will support a small gas-topower plant in the field on the site.”

Ultimately, the company is

looking towards multiple infield production plants feeding multiple needs and multiple mid- and downstream offtakers, from within the various projects within the field. Four major pillars have been defined, says Mr de Blocq.

The first one is obvious – gas sales into the existing coalpowered generation plants for flame control and ultimately for full co-generation. The Majuba Power Station, a 4,110MW coal-fired facility, is located within sight of the Amersfoort Project, and there are 10 additional power stations within 300 km, all of which utilise the existing high-voltage power infrastructure.

The other three pillars are gas supply into the existing gas transmission (Transnet’s Lilly pipeline) with distribution networks in KwaZulu-Natal; LNG production which will give the company the ability to transport gas to other remote thermal industries,; and – last but not least – production of chemical derivatives, such as urea and ammonia, two commodities that are currently mostly imported and the price of which has been skyrocketing. Creating domestic production would be a welcome benefit for SA’s economy.

The only alternative

“For South Africa, being historically heavily dependent

on coal, gas is the best solution for the country at the moment,” says Mr de Blocq. “Renewables are great, but there is a challenge in terms of the output. At very best, our installed capacity in South Africa has only been able to produce about 20% of what it’s built to do. We just have to accept that when moving away from coal, gas is currently the only alternative.”

He reflects that the oil & gas sector needs to be more communicative to highlight the importance of this resource, now and in the future. “We need to be more educational perhaps, addressing this unfortunate ignorance

surrounding oil and gas, which is often preyed on by the commercial interests of the so-called exclusive e-sector.”

“People need to understand that without oil and gas, there won’t be any wind turbines or solar panels; both are petroleum products. Gas is something that will be with us forever. We just need to be more clever about how we use it.”

The need for gas production is even more evident as the growing demand for energy in South Africa is facing shortages. This puts the Amersfoort gas-

to-power Project in Mpumalanga in a clear light. Nick de Blocq says: “We need to up our exploration game considerably to satisfy a burgeoning production need. The gas could be used yesterday.”

Going ahead

He affirms that given the recent financial injection by the latest investor, the company is now ready to become far more active. “We are having to advance efforts in exploratory terms, as we find the most expedient places and sweet spots to set up smaller infield production facilities here and there.”

“We are planning to spend at least as much in the next two years as we have in the last decade. So that represents a major uptick in that we’re right at the cusp of a stepping stone in business activity. We’re also planning to extend our geographical acreage by another 2,300 km2 by adding another large exploration block to our portfolio.”

It is an exciting development for the Amersfoort Gas Project and Mr de Blocq, who was appointed to his role last year, just as work started to gain

momentum, does not hide his enthusiasm about the future:

“I don’t recall being quite as passionate and quite as excited about any of the projects I’ve worked on in the last 34 years. What I love about what I do is the green ticket on which we approach this, we are part of the decarbonising process.”

“Being in a starting block of something that represents a major solution to the energy crisis in South Africa is such a great place to be. As an environmentalist at heart myself, I’m very proud to be leading this effort.”

People need to understand that without oil and gas, there won’t be any wind turbines or solar panels; both are petroleum products. Gas is something that will be with us forever. We just need to be more clever about how we use it.