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 domestic natural gas and helium producer 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 through the construction of Phase 2 expected around 2023/24, “arguably making it among the biggest helium projects on the planet", CEO Stefano Marani has said. This will deliver over 0.4-billion cubic feet (bcf) of helium, which, over 19 years, amounts to 7.6 bcf, or 2.2%, 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. Both stages of Phase 2 will potentially increase this to the LNG equivalent of about 600 000 ℓ/d of diesel, subject to what current studies show geologically.

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 to medium-scale production capabilities.

Phase 2 is intended to have the first stage completed by 2023/24.

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 close to R1-billion, 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 year end 2021. Phase 2 is expected to complete construction of both stages in 2025 or 2026.

Latest Developments
Renergen will, starting in January 2022, shortly after the completion of Phase 1 of its Virginia gas project, supply LNG to glass manufacturer Consol Glass.

The five-year contract will carry a price linked to the floating liquefied petroleum gas price in South Africa, as published by the Department of Mineral Resources and Energy.

The supply volumes will be ramped up over a three-month period, reaching an estimated volume of 14 t/d within three months from start as the necessary equipment is installed and tested.

This contract marks the first one for Renergen that is not linked to the supply of gas to trucks for the substitution of diesel.

“Consol is one of those household names you knew from childhood and for a young business like ours to be entering into supply agreements such as these with Consol is one that has created significant excitement in the business,” Marani has said.

The supply agreement is also indicative of the increasing emphasis that companies are placing on reducing their carbon footprint, and Marani notes that Renergen’s LNG “is the perfect way” to do this in an innovative way that gives the end-user greater predictability in terms of future energy prices.

“We look forward to nurturing this relationship and can’t wait to engage on Phase 2 in due course,” Marani concludes.

Key Contracts, Suppliers and Consultants
Phase 1:
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 (engineering, procurement and construction contractor – Phase 1 gas gathering pipeline).

Western Shell Cryogenic Equipment (technology and equipment).

Phase 2:
Saipem (front-end engineering design, or FEED) contract for the development of the downstream LNG and liquid helium processing facilities, including the associated balance of the plant).

EPCM Holdings (FEED contract – Phase 2 gas gathering pipeline).

Sproule (evaluation and certification of reserves, based on the results of the additional data acquisition and the current drilling campaign. This will build on previous work carried out by MHA Petroleum Consultants, acquired by Sproule in 2019).

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