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 option 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.

Should production be maintained, the production right has a remaining life span of about 23 years.

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 about R550-million, which includes the cryogenic liquefiers.

Planned Start /End Date
Construction is expected to start in the second half of 2019. The project is expected to reach commercial production by early 2021.

Latest Developments
Renergen has appointed EPCM Bonisana, a subsidiary of EPCM Holdings, as the engineering, procurement and construction (EPC) contractor for the gas project.

The contractor will be responsible for building the gas-gathering system connecting the gas wells for the project.

The system is a critical component of the project, as it will reticulate all the gas to a centralised point for processing before the LNG and helium is sold to customers.

To be developed over two phases, the first phase will result in  the reticulation of the 12 existing wells, along with several new wells to be drilled in the coming months. This will result in the production of about 2 700 GJ of LNG and 350 kg/d of liquid helium, starting in 2021.

The pipeline will comprise predominantly high-density polyethylene pipe buried about 2 m below the surface and will bring natural gas from various locations across the field.

The pipeline will include two compression stations, which will boost the pressure along the route that terminates at a centralised point where the gas will be processed into the end-product.

The second phase is being planned and could include the helium-bearing sandstone trap discovered on the eastern side of the project area.

Renergen has said that significant data has been obtained and is being processed to assist in the planning of the first deviated well. This will determine the scale of helium production in the second phase.

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: EPCM Bonisana, a subsidiary of EPCM Holdings (EPC contractor).

Gas processing facilities: the company has embarked on a technical and commercial exercise, which includes a detailed request for proposals, and is evaluating and clarifying this with the bidders. The gas-processing facility may be executed on an EPC management basis.

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.