South Africa getting more LNG from northern neighbor

Botala Energy, an Australian energy company focused on exploration and development opportunities for natural gas and renewables in Botswana, has signed a non-binding term sheet for a long-term liquefied natural gas (LNG) supply agreement with FFS Refiners, a South African hydrocarbon solutions provider.

According to Botala, this partnership will leverage its coal bed methane (CBM) resources from the Serowe wellfield and FFS’s market presence in South Africa to deliver reliable and sustainable energy solutions across the region. A formal gas sales agreement (GSA) detailing pricing mechanisms, delivery schedules, and logistics is expected to be executed by February 28, 2025. 

Under the term sheet, the LNG from Serowe will be transported to industrial and commercial end-users through FFS’s distribution network in a phased approach. Phase 1 will entail an initial production and supply of 50 tons per day by 2026, supported by infrastructure development at the Serowe wellfield. In Phase 2, production capacity is set to quadruple to over 200 tons per day by 2028 through additional wellfield development and midstream investments. 

Botala will be responsible for gas production, processing, and LNG logistics from the Serowe wellfield to South Africa, while FFS will manage midstream and downstream operations, including LNG distribution, customer sales, and market expansion strategies. 

The deal follows Botala’s recent partnership with NOVO Energy to address the looming gas crisis in South Africa. While the NOVO agreement focuses on developing a regional LNG supply chain with an emphasis on midstream logistics and distribution to a broad range of markets, the FFS partnership is envisaged to leverage an established downstream customer base and infrastructure tailored for industrial and commercial sectors. 

According to Botala, the two agreements enhance its ability to scale production and reach various market segments, while mitigating risks by diversifying supply. 

“This agreement with FFS Refiners builds on the increasing momentum and overwhelming interest we’ve received for gas supply from our Serowe CBM Project. South Africa’s looming gas shortage has created a desperate situation for industries seeking reliable and cleaner energy alternatives. Our partnership with FFS allows us to step up and provide a solution that directly addresses this pressing need,” said Kris Martinick, CEO of Botala Energy.

“By combining our scalable CBM resources with FFS’s established network, we can deliver sustainable energy solutions to industries at a time when they need them most. This is not just about energy security—it’s about leading the way in the regional energy transition to cleaner fuels while supporting economic and industrial growth in Southern Africa.”

The partners will work on finalizing midstream and downstream infrastructure requirements, including LNG processing, storage, and distribution facilities, explore joint investments to improve the supply chain’s efficiency, and seek options to expand the customer base for LNG in various sectors across Southern Africa. 

The agreement is conditional upon securing all necessary environmental and operational permits for the Serowe wellfield and associated LNG facilities. Once conditions precedent are satisfied, the term sheet will become a binding agreement, paving the way for phased LNG production and supply to FFS.

Andrew Canning, CEO of FFS Refiners, noted: “We are thrilled to partner with Botala to expand our LNG offerings in South Africa. Botala’s Serowe CBM Project can provide a reliable and scalable gas supply, enabling us to meet the growing demand for cleaner energy solutions across industries. This partnership is a key step in achieving our vision of delivering sustainable, cost-effective hydrocarbon solutions to our customers while supporting the region’s energy transition.”