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 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 export the balance of production, as well as the first liquefied natural gas (LNG), for commercial consumption.

Phase 1 aims to produce up to 350 kg/d of helium. Output will be increased through the construction of Phase 2, expected in 2026, “arguably making it amongst the bigger helium projects on the planet", Renergen 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 just over half of its estimated proven and probable reserves.

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 of the project will entail drilling additional gas wells, constructing additional gas-gathering pipelines and a larger processing and liquefaction facility, as well as the associated road tanker distribution and downstream customer dispensing facilities.

In this phase, production output will increase by 34 400 GJ/d of LNG and 4 200 kg/d of liquid helium, in addition to the Phase 1 operation.

Potential Job Creation
It will create an estimated 360 temporary jobs during development and construction, and an estimated 160 permanent jobs once all the clusters have been developed. Although this is small, relative to mining operations, energy is typically a catalyst and has the effect of creating significant knock-on opportunities by offering clean, reliable energy.

Capital Expenditure
The total Phase 1 projected capital expenditure to roll out the first phase of production was about R1-billion, which included the cryogenic liquefiers. Phase 2 is estimated at $1.16-billion.

Planned Start/End Date
Phase 2 of the Virginia project is expected to start construction in 2023, and is expected to start operations in 2026.

Latest Developments
Renergen announced on August 12 that its liquid helium production train is now fully operational and accumulating liquid helium inventory for sale to customers whose ISO-container is scheduled to arrive later this month.

Renergen has taken over complete operational control of the Phase 1 plant from the original-equipment manufacturer.

"We can now declare South Africa one of a select few countries worldwide to produce liquid helium for the global market," Marani said.

Since July 19, the plant has been producing liquid helium, initially using the output to cool the vacuum-jacketed pipelines and the inline helium storage tank to about 4.5 kelvin, which is a prerequisite to ensure that liquid helium from the helium separator remains liquid once sent to storage.

Additionally, the company's optimisation efforts during the commissioning phase have also yielded results, as evidenced by a significant reduction in timelines for the plant startup and cooldown processes.

The initial startup and cooldown of the integrated LNG and liquid helium plant took more than 65 days, while the most recent cooldown was accomplished in just nine days, Renergen has noted.

"A helium specialist from the US has been on site since July 26, with our project, operations and engineering teams providing expert guidance through plant performance optimisation, fine-tuning production operation and control methodologies.

"The specialist's experience with several cryogenic helium plants has helped our team greatly shorten what is typically accepted as an iterative process to optimal performance. We intend to extend his service beyond this phase into ongoing support, and will also encompass liquid helium elements of our Phase 2 project," the company said.

Key Contracts, Suppliers and Consultants
Phase 1:
Sproule, formerly MHA Petroleum (helium reserve independent expert report); and VGI (owner’s engineer regarding the engineering and procurement phase of the project).

EPCM Bonisana (gas-gathering work), a subsidiary of EPCM Holdings (engineering, procurement and construction (EPC) contractor – Phase 1 gas-gathering pipeline).

Western Shell Cryogenic Equipment (technology and equipment); Babcock (DAF CF 430 trucks); and Volvo (FM440 trucks).

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).

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

Worley RSA (scope of owners engineer role to execute the expansion of the Virginia gas project).

The company is tendering the EPC contract to experienced helium and LNG equipment suppliers, based on the FEED.

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