Tetra4 has signed a new five-year agreement to supply liquefied natural gas (LNG) to a food processing company in South Africa. The deal will provide Tetra4 with a steady source of income as it prepares to begin commercial operations at its Virginia Gas Project in the Free State province.
The agreement is a take-or-pay contract, meaning the buyer is committed to paying for the agreed gas volumes even if it does not take all of them.
The LNG will be sold at more than $16 per gigajoule, which is roughly equivalent to $16 per thousand standard cubic feet (Mscf) at current exchange rates.
Tetra4 is a South African subsidiary of Renergen. The company is developing the Virginia Gas Project, which is expected to produce both LNG and liquid helium.
The latest agreement means Renergen now has contracts covering about 75% of the LNG expected from Phase 1 of the project.
The company is still talking to other potential customers as it works to secure buyers for the remaining LNG and helium volumes.
Renergen expects to complete the contracting process for all Phase 1 LNG and liquid helium production during the third quarter of 2026.
Phase 1 is expected to produce about 2.5 million standard cubic feet of LNG per day and around 70 Mscf of liquid helium per day. Commercial production is also expected to begin in the third quarter of the year.
The project is important because it will become South Africa’s first commercial LNG and liquid helium plant.
Renergen began exploring the area in 2012 after purchasing exploration and gas rights covering about 187,000 hectares around Virginia, Welkom and Theunissen in the Free State.
A major gas discovery followed in 2014, when exploration work found methane and helium trapped deep underground.
Further drilling between 2019 and 2020 helped confirm the size and quality of the gas resources.
One of the wells drilled during the programme produced more than 850,000 standard cubic feet of gas per day during testing. The company expects the Virginia project to generate more than $27 million in annual revenue once Phase 1 is operating, based on expected LNG and helium prices. Renergen says it expects to begin recording revenue during the second half of 2026.
The company is also looking beyond Phase 1. Renergen is in discussions with other customers for LNG and liquid helium from both Phase 1 and the planned Phase 2 development.
For South African businesses, the project could provide another source of gas for industrial use. For Tetra4 and Renergen, securing buyers before full production begins gives the project a clearer path to making money once the plant starts operating.
The company now faces the next major step: completing Phase 1 and starting commercial production as planned. If construction and commissioning remain on schedule, the new LNG supply agreement could become an important part of the project’s early revenue stream.
