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 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 estimated at R500-million, which includes the cryogenic liquefiers.

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

Latest Developments
Renergen has completed the commissioning of its second compressed natural gas (CNG) filling station, in Johannesburg. The filling station has been established as the dedicated station for Black Knight Logistics, as part of its transition to more sustainable fuels. The station will be used to service the trucks Black Knight is converting to run on natural gas.

Black Knight and Babcock Transport Solutions have converted the run on a combination of CNG and diesel simultaneously, known as diesel dual fuel (DDF). DDF vehicles have lower running costs and substantially lower greenhouse-gas emissions, compared with vehicles operating on diesel alone.

The filling station will operate until the LNG facility at Renergen’s Virginia gas project comes on line in 2021, at which point all CNG will be replaced in favour of the more energy-dense LNG.

This will also help to increase the distance the trucks can travel between refills.

The filling station will start supplying CNG to Black Knight Logistics for a fleet of about 15 trucks, in October 2019.

Using natural gas as an alternate fuel source has been a significant topic in South Africa’s automotive industry for years, owing to the growing need to curtail dependency on conventional fossil fuels, the soaring price of diesel and petrol, and the need to reduce harmful carbon dioxide emissions.

Meanwhile, Renergen has confirmed that drilling at its Virginia gas project is on schedule and “making good progress”.

The project’s drilling contractor, Bohrmeister Technik, has partially completed the vertical section and has reached a total vertical depth of 145 m.

Additionally, Renergen says the Bohrmeister team is focused on completing the surface section, which includes casing, logging, cementation and pressure testing on site.

The next phase of drilling will result in the mobilisation of the horizontal directional drilling rig, which will result in 1.5-km-long string being drilled into the sandstone to intercept the gas-bearing structures within the two primary target zones – the upper Vryheid Formation sandstones and the Dwyka Group diamictite.

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 has evaluated and clarified the various aspects  with the bidders. The gas-processing facility will be contracted shortly on an engineering and procurement supply contract 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.