Name of the Project
Virginia gas project.

Location
The project spans 187 000 ha of gasfields across Welkom, Virginia and Theunissen, in the Free State, South Africa.

Project Owner/s
Tetra4, a subsidiary of Renergen.

Project Description
The project entails the construction of a 52 km gas-gathering pipeline and cryogenic liquefaction processing facilities.

The aim is to produce all South Africa’s helium requirements and potentially export the balance of production, as well as produce the first liquefied natural gas (LNG) locally available for commercial consumption.

Phase 1 aims to produce 350 kg/d of helium and ramp up to 1.2 t/d and 5 t/d of helium in Phase 2.

Additionally, Renergen will concurrently produce up to 10 000 GJ/d of LNG upon reaching full production. This amount of energy is equivalent to 277 000 ℓ/d of diesel.

Should production be maintained, the production right has a remaining life span of about 23 years.

Potential Job Creation
Despite the project’s size relative to traditional mining operations, it will create an estimated 360 temporary jobs during development and construction, and an estimated 82 permanent jobs once all the clusters have been developed.

Capital Expenditure
The total projected capital expenditure to roll out the first phase of production is estimated at R500-million, which includes the cryogenic liquefiers.

Planned Start /End Date
Phase 1 of the Virginia project is expected to start producing LNG and liquid helium by 2021. Phase 2 is expected to start construction in 2022 or 2023.

Latest Developments
Renergen expects the appraisal programme for its Virginia gas project to spud ahead of schedule during the first week of February.

The company has also advised that the first planned incline in Phase 1’s development has gone well.

The updates follow after Renergen confirmed in December that the horizontal well intersected gas-charged sandstone in the inclined section of the well.

After drilling ahead through the interpreted sandstone section and into the underlying formation, and intersection of several fractures, the well flowed gas to surface at more than 850 000 standard cubic feet a day.

The sandstone deposit subsequently holds an estimated helium concentration of 12%, with the balance of the gas being predominantly methane.

Drilling operations were suspended over the holiday period, except for occasional flaring and monitoring, which confirmed no reduction in the gas pressure in the well.

In a separate statement, Renergen has also announced the successful placement of 5.6-million CREST Depository Interest (CDI) shares at A$1.20 a share, raising A$6.7-million.

The placement, which is supported by several Australian, New Zealand and offshore investors, has been made in part to replenish the cash used to acquire the remaining stake in Tetra4, making Renergen the sole holder of the Virginia gas project.

The balance of the proceeds raised will be used to further explore the gas discovery made last month while drilling in the sandstone.

With construction of Phase 1 "well under way and on schedule", Renergen CEO Stefano Marani has confirmed that the company is placed to start production of 2 700 GJ of LNG and 350 kg of helium a day by mid-2021.

Key Contracts and Suppliers
MHA Petroleum (helium reserve independent expert report) and VGI (owner’s engineer with regard to the engineering and procurement phase of the project).

Gas gathering work: EPCM Bonisana, a subsidiary of EPCM Holdings (EPC contractor).

Western Shell Cryogenic Equipment (contract to supply the technology and equipment for the plant).

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Renergen, tel +27 10 045 6000, email info@renergen.co.za or investorrelations@renergen.co.za.