South African energy company Renergen, which currently produces compressed natural gas, has opened bids for a share of a liquefied natural gas (LNG) project in the Free State province, the first of its kind for South Africa. Bidders must submit their interest in the project by August 27, with a formal auction date to be announced shortly thereafter.
The company’s Virginia Gas Project, which comprises exploration and production rights of 187,000 hectares of gas fields, is expected to start producing LNG in the third quarter of 2021.
The natural gas in these fields contains almost no higher alkanes (such as and butane), so it is relatively easy to liquify. It also contains rich helium concentrations, amounting to roughly half of the United States’ reserves – and the US is the world leader in helium production. Renergen plans to start producing helium in 2023.
Should the LNG project prove successful, it will make a huge difference in diversifying South Africa’s energy portfolio, which is dominated by coal for domestic use and for export. Renergen will partner with Total South Africa to distribute the LNG through Total’s filling stations, mainly for use by logistics companies’ trucks – the LNG will replace diesel.
The source of the Virginia Gas Project’s natural gas is primarily microbial, so it’s a sustainable resource. Producing a carbon-negative fuel is critical if South Africa is to move away from fossil fuels and toward renewable energy.