Legal victory for Renergen brings regulatory clarity to South Africa’s gas sector

South African natural gas and helium producer Renergen has achieved a “landmark legal victory that brings much-needed regulatory clarity to South Africa’s petroleum sector,” the company said in a press statement on May 6.

The ruling of the High Court of South Africa in favour of Renergen’s subsidiary Tetra4 effectively frees the company’s onshore helium and natural gas production from operating under the National Energy Regulator of South Africa (NERSA) regulations.

According to the court order, granted on May 2, the Gas Act of 2001 does not apply to production and incidental activities related to upstream petroleum activities, including a requirement for licensing of trading, construction, and operation of liquefaction facilities outside the piped gas industry.

Tetra4 initiated High Court motion proceedings in December 2021 to seek clarification on the jurisdiction of NERSA regarding certain operational activities. The court established that these activities fell under “the regulatory purview of the Production Right granted in accordance with the Mineral and Petroleum Resources Development Act 28 of 2002.”

The ruling resolved the ambiguity and potential contradictions arising from disparate sets of legislation affecting Tetra4, Renergen said. The court ruled that Tetra4 did not require a NERSA licence for trading in gas, such as methane and helium, when such trading occurred outside the piped gas industry, not involving the national pipeline grid or downstream market regulated by NERSA.

Furthermore, the court clarified that the Gas Act regulated only hydrocarbon gases transported by pipeline, and did not cover noble gases such as helium. Thus, helium production and trading are outside NERSA’s regulatory reach, the judgement said.

“This judgement is a landmark win for Tetra4 and the entire upstream gas industry. It affirms that upstream gas production and related activities, including on-site liquefaction, are outside the scope of the Gas Act and Nersa's licensing regime, provided they do not supply the regulated piped gas industry,” said Renergen’s CEO and managing director Stefano Marani.

“This clarity reduces regulatory duplication, lowers barriers to entry and creates a more enabling environment for upstream gas development in South Africa,” he added.

Renergen Limited is an integrated energy company focused on the exploration, production and sale of liquefied natural gas (LNG) and helium in South Africa. The company's primary asset is the Virginia Gas Project, located in the Free State province, which encompasses approximately 187,000 hectares of gas fields across Welkom, Virginia and Theunissen.

The company’s innovative approach to energy production and its focus on sustainable solutions position it as a key player in South Africa’s energy sector. Renergen is dual-listed on the Johannesburg Stock Exchange (JSE) and the Australian Securities Exchange (ASX).