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, in South Africa.

Project Owner/s
Tetra4, a subsidiary of Renergen.

Project Description
The project entails the construction of 52 km of 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. Output will be increased to up to 10 000 kg/d of helium in Phase 2, “arguably making it amongst the biggest helium projects on the planet", CEO Stefano Marani has said. This will result in 0.7-billion cubic feet (bcf), which over 19 years amounts to 13.87 bcf, or 4%, of the 344 bcf prospective resource.

Renergen is also in the construction phase of South Africa’s first commercial LNG plant.

Phase 1 of the project will produce about 50 t/d of LNG, which is about 75 000 ℓ/d of diesel equivalent. Phase 2 will potentially increase this to the LNG equivalent of about 300 000 ℓ/d of diesel.

Phase 2 allocations will likely result in the project’s transforming into a significant LNG production facility, placing the project more in line with global small-scale production capabilities.

Phase 2 is intended to be completed by late 2023, by which time more than 150 wells would have been added.

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 R750-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 complete construction in 2023 or 2024.

Latest Developments
Renergen has signed an agreement with trucking company Logico Logistics to supply LNG at Total filling stations along the N3 between Johannesburg and Durban.

Logico specialises in the retail industry and fast-moving consumer goods and provides abnormal-length transport services to a range of customers in many industries, with a primary focus on rail and pipe.

The company also provides secondary distribution solutions to its clients in KwaZulu-Natal and Gauteng.

Logico MD Clint Brooks says, “duel fuel trucks are undoubtedly the way forward and the ability to implement is on our doorstep”.

Brooks and Logico CEO Bryan Cuff believe gas-fuelled trucks “will become a reality in the medium-term when Renergen expands its production and footprint in South Africa”.

Renergen CEO, meanwhile, has said that the adoption of sustainable solutions in business has reached a tipping point and that “partners like Logico are among those leading the pack”.

LNG, when used as a substitute for diesel in trucks, not only results in significant cost reduction but has the added benefit of reducing greenhouse-gas emissions. The longevity of engines also improves owing to the lower levels of impurities in fuel, which in the long run, adds to the savings when switching from diesel to LNG, he adds.

The LNG filling stations will be operational by the start of the third quarter of 2021, at the latest, Total South Africa regional sales manager Lebogang Buthelezi said in July.

The agreement with Renergen is in line with Total’s strategy to progress to a more carbon-neutral space, with cleaner and more sustainable energy sources.

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

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

Western Shell Cryogenic Equipment (technology and equipment), and Bohrmeister Technik (Phase 1 – drilling contract).

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