Name of the Project
Free State natural 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.

Based on Renergen’s five-year production mark, it is feasible that the company can produce between 1 000 kg/d and 1 500 kg/d of helium, which could increase to about 5 000 kg/d, should it have the possibility of tapping into the contingent reserves.

Additionally, Renergen will produce, concurrently, 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.

Potential Job Creation
Despite the project’s size relative to traditional mining operations, it will create an estimated 360 temporary jobs over the period of 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 about R450-million, which includes the cryogenic liquefiers that will cost between $15-million and $20-million for Phase 1.

Planned Start /End Date
As a result of significant engineering, Tetra4 will start construction of natural gas liquefiers in late 2018/early 2019. It is envisaged that liquefier construction will take about 18 months, but until this construction starts this timeline cannot be finalised.

Latest Developments
Renergen’s Tetra4 subsidiary has secured an agreement with fuel products distributor Black Knight Group for the sale of LNG.

The acquired LNG is intended to fuel about 100 trucks.

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: The company has embarked on an expression of interest (EOI) for the construction of its gas gathering work. The purpose of the EOI is to gauge the appetite and support for the project to prepare a shortlist of suitably qualified construction companies to execute the work on a full turnkey engineering, procurement and construction (EPC) basis. The next step involves issuing a request for proposal and a final adjudication could be forthcoming before the end of 2018.

Gas processing facilities: The company has embarked on a technical and commercial exercise with five suitably qualified companies. Following a review by Renergen’s internal and external engineering teams, a final comprehensive request for proposal has now been issued to the remaining three bidders. The project will be executed on a full EPC turnkey basis and a final adjudication could be forthcoming before the end of 2018.

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.