Virginia gas project, South Africa – update

Image of Virginia gas project

11th February 2022

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor


Font size: - +

Name of the Project
Virginia gas project.

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 domestic natural gas and helium producer Renergen.

Project Description
The project entails the construction of 52 km of 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 through the construction of Phase 2 expected around 2023/24, “arguably making it among the biggest helium projects on the planet", CEO Stefano Marani has said.

This will deliver more than 0.4-billion cubic feet (bcf) of helium, which, over 19 years, amounts to 7.6 bcf, or 2.2%, of the 344 bcf 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. Both stages of Phase 2 will potentially increase this to the LNG equivalent of about 600 000 ℓ/d of diesel, subject to what current studies show geologically.

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 small- to medium-scale production capabilities.

Phase 2 is intended to have the first stage completed by 2023/24.

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 R1-billion, which includes the cryogenic liquefiers.

Planned Start/End Date
Phase 1 of the Virginia project was expected to start producing LNG and liquid helium by the end of 2021, however, this has been delayed by Covid-19. The revised scheduled forecasts the startup of commercial operations in April 2022.

Phase 2 is expected to complete construction of both stages in 2025 or 2026.

Latest Developments
Renergen has concluded an LNG supply agreement with Italtile subsidiary Ceramic Industries.

Supply from Phase 1 operations at Renergen’s Virginia gas plant will start in the first quarter of this year.

The Phase 1 agreement spans five years from the date of start of supply and will result in the company’s supplying up to 800 GJ/d of LNG at a fixed price, with yearly escalation linked to the consumer price index.

The agreement will also include two further five-year renewal periods at the customer’s discretion.

The agreement is subject to several conditions, such as the successful commissioning of Renergen’s Phase 1 operations, and the company’s commissioning duly permitted facilities to store and supply LNG at the customer’s site.

In addition, the customer will be expected to have completed the connection of its equipment to the Renergen battery limit of the facility at its site.

The agreement marks the company’s second and final industrial contract from Phase 1.

Key Contracts, Suppliers and Consultants
Phase 1:
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 (engineering, procurement and construction contractor – Phase 1 gas gathering pipeline).

Western Shell Cryogenic Equipment (technology and equipment).

Phase 2:
Saipem (front-end engineering design, or FEED) contract for the development of the downstream LNG and liquid helium processing facilities, including the associated balance of the plant).

EPCM Holdings (FEED contract – Phase 2 gas gathering pipeline).

Sproule (evaluation and certification of reserves, based on the results of the additional data acquisition and the current drilling campaign. This will build on previous work carried out by MHA Petroleum Consultants, acquired by Sproule in 2019).

Contact Details for Project Information
Renergen, tel +27 10 045 6000, email or

Edited by Creamer Media Reporter



Weir Minerals Africa and Middle East
Weir Minerals Africa and Middle East

Weir Minerals Europe, Middle East and Africa is a global supplier of excellent minerals solutions, including pumps, valves, hydrocyclones,...

VEGA Controls SA (Pty) Ltd
VEGA Controls SA (Pty) Ltd

For over 60 years, VEGA has provided industry-leading products for the measurement of level, density, weight and pressure. As the inventor of the...


Latest Multimedia

sponsored by

On-The-Air (17/05/2024)
On-The-Air (17/05/2024)
17th May 2024 By: Martin Creamer
Magazine round up | 10 May 2024
Magazine round up | 17 May 2024
17th May 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?







sq:0.556 0.627s - 167pq - 2rq
Subscribe Now