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, making it amongst the bigger helium projects in the world.

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.

The source of the Virginia gas project’s natural gas is primarily microbial. It originates from deep within the Witwatersrand Supergroup through groundwater circulating through large faults and contacting bacteria deep within the earth’s crust.

This means the methane is biogenic and a continuing renewable resource. Its natural gas contains one of the richest helium concentrations recorded globally.

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. 

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 has achieved significant operational milestones at the project in the past financial year ending February 28, 2025. The company successfully completed the system integration and final commissioning of the liquefied helium production train, leading to the first commercial sale of liquefied helium in March 2025, shortly after the reporting period. Renergen had previously assumed full operational control of the Phase 1 plant from the original equipment manufacturer in July 2024. 

LNG production for the financial year 2025 totalled 4 885 t, marking a substantial 70% increase year-on-year, with a consistent average monthly production of about 407 t.

In terms of project development and exploration, two new wells – T4KK011 and T4KK011 REV – were successfully drilled, confirming significant helium concentrations (3.32% and 2.68% respectively) and demonstrating commercial gas flows. These wells have been converted to production-ready status, laying the foundation for future resource development. 

While the positive Phase 2 environmental authorisation received in July 2023 faced an unsuccessful appeal, the Forestry, Fisheries and the Environment Minister Barabara Creecy dismissed five out of seven grounds, directing Renergen to expand on climate-impact assessment reports for the remaining two. The company is actively addressing these concerns to progress Phase 2.

Financially, Renergen has actively pursued funding to support the project's expansion. This included securing a $4-million debenture subscription from AIRSOL (bringing total investment to $7-million), settling a R303-million bridge loan, and acquiring a new R155- million secured loan from Standard Bank of South Africa for working capital and capital expenditures. Additionally, the company issued more than 7.3-million ordinary shares, raising R39.3-million to fund Phase 1C completion and bolster general working capital.

Looking ahead, Renergen's immediate priorities include completing Phase 1C drilling, pipeline, and third compressor station construction, alongside ramping up LNG and liquid helium production to nameplate capacity. 

The company is also focused on finalising predevelopment and permitting requirements for Phase 2. These efforts are crucial for generating early cash flow and reducing execution risk, reinforcing the Virginia gas project's strategic position as a world-class helium and natural gas resource in a low-risk jurisdiction amidst surging global demand for critical minerals.

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.