Photo by: Renergen
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 the first liquefied natural gas (LNG) for commercial consumption.
Phase 1 aims to produce 350 kg/d of helium. Output will be increased through the construction of Phase 2, expected in 2025, “arguably making it among the biggest helium projects on the planet", Renergen 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 of its estimated proven and probable 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 being scoped by Renergen and offtaker 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 started commercial operation at the beginning of September 2022.
Phase 2 is expected to complete construction in 2025 or 2026.
Latest Developments
Renergen’s LNG plant has resumed operations following repairs to a faulty conduction oil system, which recently resulted in the company’s deciding to halt operations to protect the helium and nitrogen modules.
Since the repair work, the system had been thoroughly tested and the LNG system was operational again and producing LNG, Renergen confirmed on November 15.
Commercial deliveries to the company’s customers will start shortly.
The operations team will now focus on the remaining modules to allow for the helium liquefaction module to be turned on.
The helium separation and recovery module is providing high levels of confidence, with recovery exceeding design parameters, Renergen has said.
Key Contracts, Suppliers and Consultants
Phase 1:
Sproule, formerly MHA Petroleum (helium reserve independent expert report); and VGI (owner’s engineer regarding 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.