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 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 2025, “arguably making it among the biggest helium projects on the planet", CEO Stefano Marani has said.

This will deliver more than 0.4-billion cubic feet (bcf) of helium, which, over 19 years, amounts to 7.6 bcf, or just over half its estimated 2P proven reserves.

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 1 000 000 ℓ/d of diesel, subject to the final agreed design currently being scoped by Renergen and Ivanhoe Mines.

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 2025.

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 160 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 R1-billion, which includes the cryogenic liquefiers.

Planned Start/End Date
Phase 1 of the Virginia project was expected to start producing LNG and liquid helium by the end of 2021, but this was delayed, owing to Covid-19. The revised schedule forecasts the startup of commercial operations in April 2022.

Phase 2 is expected to complete construction 2025 or 2026.

Latest Developments
Renergen will hot commission various utility systems at its Virginia gas project, starting with air and nitrogen, shortly.

On April 12, the company said this would allow for the flushing of some of the process plant areas to start.

On April 10, generators were synchronised and the breaker to the main supply substation was opened and tests conducted. The breaker to the two 6.6/400 kV transformers was opened and will run on a low-load condition, which will enable the transformers to “soak” until operating conditions are attained.

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); Babcock (DAF CF 430 trucks); and Volvo (FM440 trucks).

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 undertaken 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.