Natural gas and helium producer Renergen is securing financing for Phase 2 of its Virginia gas project the completion of which it hopes to achieve by 2025.
The project comprises exploration and production rights for 187 000 ha of gasfields across Welkom, Virginia and Theunissen, all in the Free State.
“We were granted the authorization in 2012 and it took us from 2012 to 2022 to bring the facility into operation,” says Renergen CEO Stefano Marani, adding that, while the time allocated to construction was two years, the rest of the time was spent dealing with red tape.
“Phase 2 will obviously be a more significant plant than the first phase, providing up to 600 t/d of liquefied natural gas (LNG) whereas the first phase will only produce 50 t/d. The helium will also be stepped up significantly, starting at around 350 kg/d in Phase 1 and expanding to 5 000 kg/d in Phase 2. It will, therefore, be a significant pool of energy that we'll bring online,” he explains.
While this expansion will take place in stages, the first stage encompasses connecting existing wells to a new gas pipeline and constructing a new helium and LNG plant.
With there being “a great need” for energy and gas in South Africa, Marani emphasises that the Virginia gas project has paved the way to smooth the path for the rest of the industry, hopefully clearing significant amounts of red tape for other producers.
“We hope that the rest of the industry starts to follow suit as quickly as possible so that we can bring more domestic indigenous gas online as fast as possible.”
Local gas is beneficial for South Africa for a variety of reasons, says Marani.
Firstly, if South Africa produces it on shore, it will no longer require imported liquid energy.
However, if the country continues to buy liquid fuels – a constant draining of cash from the system – it will continue to put a burden on the currency. By ensuring South Africa has gas locally, it will solve that challenge, he explains.
Further, gas will assist South Africa in developing its own energy security.
“There's too much focus on coal and State-owned power utility Eskom, as opposed to the liquid fuels,” says Marani.
He adds that South Africa has an abundance of gas, and it is a lot cleaner than coal. This gas could ultimately play a vital role in transforming the country’s economy into one with lower carbon emissions.
Gas, from a chemical perspective, also has a lot of applications and can play an important role as a transition fuel for the hydrogen economy, highlights Marani.
In terms of emissions, LNG is a better option than diesel and coal and while it does not produce zero emissions, it will reduce emissions on the journey towards producing green electricity using hydrogen.
“If we want to eventually get to the point where we have a hydrogen economy, it will require gas beforehand and the LNG infrastructure to lay the plumbing so that we can have a hydrogen economy,” Marani concludes.