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Virginia gas project, South Africa

7th August 2020

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

     

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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, in 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.

Phase 1 aims to produce 350 kg/d of helium. Output will be increased to up to 10 000 kg/d of helium in Phase 2, “arguably making it amongst the biggest helium projects on the planet", CEO Stefano Marani has said. This will result in 0.7-billion cubic feet (bcf), which over 19 years amounts to 13.87 bcf out of 344 bcf, or 4%, of the prospective resource.

Renergen is also in the construction phase of South Africa’s first commercial LNG plant.

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 300 000 ℓ/d of diesel.

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 production capabilities.

Phase 2 is intended to be completed by late 2023, by which time more than 150 wells would have been added.

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 R750-million, which includes the cryogenic liquefiers.

Planned Start /End Date
Phase 1 of the Virginia project is expected to start producing LNG and liquid helium by 2021. Phase 2 is expected to complete construction in 2023 or 2024.

Latest Developments
Renergen has completed the design of its Virginia gas plant, 22 days ahead of schedule.

The significant achievement marks the completion of the fourth major milestone at its Virginia gas project.

The company is working towards a production start date in 2021.

Meanwhile, the drill rig at the Virginia gas project production hub is preparing to spud the first well in the programme.

The upcoming programme of inclined wells target the gas productive fracture systems at the project.

After several weeks of careful planning and interaction with the company’s geological and engineering consultants, Renergen believes it has planned a hole “which will maximise [the project’s] chances of gas intersection along the interpreted fracture systems”.

Results are still about a month away, Marani has said. 

Key Contracts and Suppliers
Sproule (formerly MHA Petroleum – helium reserve independent expert report) and VGI (owner’s engineer with regard to the engineering and procurement phase of the project).

EPCM Bonisana (gas gathering work), a subsidiary of EPCM Holdings (EPC contractor).

Western Shell Cryogenic Equipment (technology and equipment), and Bohrmeister Technik (Phase 1 – drilling contract).

Contact Details for Project Information
Renergen, tel +27 10 045 6000, email info@renergen.co.za or investorrelations@renergen.co.za.

 

Edited by Creamer Media Reporter

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