Photo by: Creamer Media's Dylan Slater
Emerging natural gas producer Renergen's Virginia gas project, in the Free State, has the potential to position South Africa as a prominent player in the helium market.
As a result, South Africa could become the eighth country in the world to export helium.
The project also marks the construction of South Africa's first commercial liquefied natural gas (LNG) liquefier, and will result in dual-listed Renergen starting commercial production of both LNG and liquid helium by 2021.
Where the helium concentrations of projects across the world typically range between 0.1% and 0.3%, CEO Stefano Marani tells Engineering News Online that the Virginia project's wells contain concentrations of between 2% and 11%, "which arguably makes it the richest concentration of helium on the planet".
Turning towards the global helium shortage, Marani says that, "apart from saving the world's party balloons", the biggest challenge is that the lack of helium is starting to impact on hospitals, which use helium in magnetic resonance imaging and computed tomography scans.
Helium is also used to manufacture electronics, including televisions, cellphones and laptops.
With global consumption of about 80 t a day, the Virginia project's field, as it stands now during Phase 1, will only supply about 350 kg a day.
Phase 2 of the project will, however, increase production to between 1.2 t and 5 t of helium a day.
"That would be a meaningful amount and would [position] South Africa as one of the top producers of helium," Marani tells Engineering News Online.
According to Marani, the significant global shortfall in helium supply will not be resolved until 2025, or even 2026.
Further, while this field is not touted as the silver bullet to South Africa's energy crisis, Marani explains that the project plays within a niche market. Renergen is currently using the project's resources as a substitution for diesel in vehicles, which Marani enthuses "has massive benefits from a greenhouse gas and running cost perspective".
Once Phase 2 of the Virginia gas project has been fully developed and is in full scale operation, Renergen will only be substituting 0.7% of the diesel that goes into trucks.
"We feel that, while it's not a major amount, we can offset quite a number of South Africa's imports when it comes to energy and it will make us a net exporter of helium."
He adds that Renergen is "significantly comfortable" with the fact that, based on its preliminary reserve estimates, there is enough of the resource to build Phase 1 of the project to be on line and producing revenue by 2021.
Phase 2 is expected to come on line between 2022 and 2023.
From a national perspective, the project has also introduced R700-million of foreign direct investment into South Africa, which Marani says "is coming into the country at a time when it definitely could use it".