Natural gas producer Renergen says its helium system integration is nearly complete and no significant issues have been detected.
The group, which owns onshore exploration and production rights for 187,000ha of gas and helium fields in the Free State, on Thursday gave a quarterly update as required by the Australian stock exchange. This is where it has a primary listing, with a secondary listing on the JSE.
The share price closed 3.2% higher at R11.25 on Thursday, way off its peak of R43 in 2022, as investors await the long-promised production of liquid helium.
Renergen had said it would be producing 300kg of liquid helium a day by 2021. The helium production date was then shifted to July 2022 and again to late 2023. It is not yet producing helium.
Meanwhile, Renergen said it produced 154 tonnes of liquefied natural gas (LNG) in February after repairs to its equipment were needed. This is far off its target of 50 tonnes a day in phase 1, which it detailed in previous communications.
Renergen sells LNG to Italtile and Ardagh (formerly Consol Glass), but Italtile confirmed to Business Day in February it was not yet receiving the full quantity which was contractually agreed.
Renergen is loss-making and relies on lenders and some income from its LNG. According to its quarterly update, it has to repay a R47.1m loan by August 2024, R7m by February 2025 and another R338.8m, plus 15.4% interest, by June 2025.
The group, which is led by US-based CEO Stefano Marani, said the original equipment manufacturer (OEM) supplier arrived on site in late February to complete the final step in commissioning of the plant, “which is progressing well”.
“We confirm that the nitrogen cold box and helium cold box have both been fully integrated, and the helium storage tank is cooled to 20 degrees kelvin (K),” Renergen said in a statement.
It successfully recovered its tail gas stream — gas produced directly from its wells that has been processed and has had the methane separated out in the LNG cold box module — into concentrated helium of 99.95% purity, achieving the design specifications before liquefaction.
The helium then faces a last filtration process to reach 99.999% purity for liquefaction. These results have been externally verified by an independent SA National Accreditation System-approved laboratory.
The OEM and Tetra4 were completing the last set of checks and assessments before collectively embarking on the next step of commercial liquification for customers. It said the liquification process had already been fully tested, and Renergen expected no challenges in achieving the next milestone.
Once liquification commences, the liquid helium would be used to further cool down the storage tank to 4K and would signal the commencement of the final performance test to be undertaken by the OEM supplier, it said.
The company announced the conditions precedent relating to the investment by Mahlako Gas Energy into the Virginia Gas Project were satisfied and the proceeds were settled.
The transaction saw the disposal of 5.5% of Tetra4, the Renergen subsidiary that holds the Virginia Gas Project, for R550m.
“Our focus will be to continue to ramp up production and increase efficiency and reliability in the months to come,” it said.
It is still to list on the Nasdaq as it planned to late last year. It needs to raise $200m (R3.8bn) to access $750m in promised funding for further development of the gas plant. Without this capital it may not be a going concern, according to its auditors.
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