Renergen, South Africa’s first onshore helium and liquefied natural gas production facility, on Monday raised concerns over alleged unauthorised solar facility construction by Springbok Solar in an area designated for future natural gas extraction.
Renergen, which holds a valid onshore petroleum Production Right under the Mineral and Petroleum Resources Development Act (MPRDA) since 2012, said Springbok Solar began building its project without obtaining required permissions under Section 53 of the MPRDA.
“In an egregious attempt to force the company into granting them such permission, the company noted an unrelated appeal by Springbok Solar challenging aspects of the production right, which has no bearing on the case at hand. We believe the challenge by Springbok Solar lacks substance to make changes to the company's Production Right and will likely take years before it reaches a court for a decision,” it said.
According to Renergen, the law mandates that new developments within a petroleum Production Right area secure the production right holder’s consent and establish a co-existence agreement to ensure operational harmony. Despite attempts to engage with Springbok Solar, Renergen says it has faced resistance, particularly in securing a buffer zone to protect its access to key gas-bearing structures critical to its core business.
In a statement, CEO Stefano Marani said Renergen supported renewable energy.
"We welcome solar developments as a key to bolstering South Africa's energy landscape," Marani said. "Helium, which we produce, is essential in fabricating solar panels and wind turbines, making our coexistence mutually beneficial."
He added that while Renergen has established successful partnerships with other solar developers in the region, Springbok Solar’s construction has proceeded without regard for Renergen’s rights or legal stipulations.
Marani said, “We are meaningfully engaged with many other solar developers in the area, requiring no compensation on the basis that they design their installations around our gas bearing structures, and have good relationships with all of them.”
However, he said in the case of Springbok Solar project, construction commenced without Renergen’s prior consent or a co-existence agreement, “thus not taking our requirements, or those stipulated in the law, into account."
Renergen’s commitment to natural gas extraction aligns with its mission to decarbonise South Africa’s heavy logistics and manufacturing sectors. Marani said Renergen’s goal remains to safeguard its resources and shareholder value, saying that access to gas structures is integral to these efforts.
In response to the ongoing unauthorised development, Renergen said it will continue pursuing a legal resolution to protect its access rights under the MPRDA, while upholding the interests of all stakeholders.
Springbok refutes claim
However, Springbok Solar Power Plant on Monday said is has obtained all necessary lawful authorisations to begin construction of its facility.
Springbok said,"The area designated for the solar facility is not highlighted for gas or mineral production activities in any of Renergen's existing publicly available prospecting or production plans or permit applications."
It added that it would continue to follow due legal processes.
By 10.20am Renergen's share price on the JSE was 2.75% higher at R9.72, down 39.75% in the year to date.
The news comes a week after Renergen said it anticipated interim earnings for the period ended August 2024 to be at least 43% weaker due to delays in production of helium and LNG.
The company has indicated that they expect their half-year losses per share to range between 42.7 cents and 48.7 cents, representing a staggering 43% to 63% increase in losses from the previous period, where they reported a loss of 29.91 cents per share.
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