First South African commercial gas project comes online

JSE-listed company Renergen has announced that the Virginia Gas Project plant in the Free State is operational and will begin delivery to customers.

The plant is South Africa’s first commercial liquified natural gas (LNG) station. 

‘Watershed moment’

“This watershed moment in the company’s life cycle has finally arrived. This is a significant step on the path to showing the world that Renegen can become a global player in liquid helium supply and a material local supplier of much-needed LNG,” chief executive Stefano Marani said.

On Monday, Marani said he was pleased “to announce a major milestone, with the Virginia Gas Project now operational, transitioning Renergen from explorer to producer status by producing liquid hydrocarbons, with the helium module producing liquid in due course”.

He added that Renergen had started filling bulk storage tanks to begin delivery of products to customers.

Marani mentioned that Renergen would focus on getting phase 1 fully operational over the coming months. Phase 1 would play a key role in reducing the country’s carbon footprint by substituting diesel in trucks. It would also be for commercial users.

“The transformation of the company since first listing in 2015 has been truly incredible and I am very proud of the efforts, hard work and determination of the team in getting Renergen to the position we find ourselves in today. Virginia is a world-class project and we will now focus on ramping up operations to full phase 1 capacity over the coming months.”

The company aims to fill the gap in the growing demand for helium from the healthcare, technology and aerospace sectors and the shortage in the global market.

Last month, the Central Energy Fund announced it would invest R1-billion in the gas project, in return for a 10% stake, to aid its phase 2 development. The revenue from the first phase would also be used to develop the second phase. 

Phase 1 involved an undisclosed investment of $60-million (over R1-billion).

Ramaphosa’s plan

The project is in line with President Cyril Ramaphosa’s recent announcement of a plan to address the energy crisis to allow new-generation projects to come online faster, on an urgent basis.

He said the government would take a more “pragmatic approach” regarding local-content requirements when sourcing new solar and wind projects.

“There will also be a new bid window for battery and gas power, with future windows being opened on an expedited basis,” he said.

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