Natural gas and helium producer Renergen has reported an increase in liquefied natural gas (LNG) production thanks to improved operational efficiency at the Virginia gas project.
In its latest update released on Tuesday, Renergen said LNG production rose by 22% to 1,371 tonnes in the fourth quarter.
Earlier in March, Renergen announced its long-awaited first commercial sales of liquid helium from its Virginia gas project in the Free State, after technical challenges related to liquid helium storage were resolved. This resulted in the company’s share price soaring more than 37%.
The company had planned to start helium production in 2016, with commercial sales to follow by 2018. However, these and several other deadlines were missed as a result of technical issues and operational setbacks, including a leak in a helium cold box discovered in mid-2023, which halted production.
To resolve the issue, the company began using smaller Dewar containers for liquid helium storage, enabling it to commence commercial sales.
Renergen bought the Virginia gas project in 2015. The project is SA’s first onshore natural gas exploration and production project, focusing on LNG and liquid helium production. The project started producing LNG in November 2022 and achieved initial helium liquefaction in January 2023.
In addition to operational issues, the company has been grappling with environmental and legal challenges, a cash shortfall, and is scrambling to regain investor confidence.
Renergen is involved in a dispute with Springbok Solar over a solar project that allegedly encroaches on Renergen’s production right. The matter was heard in court in February, with judgment pending.
In a statement on Tuesday, the company said it is working to secure funding for the completion of Phase 1C of its Virginia gas project, with negotiations expected to conclude in the coming weeks.
Helium has become a sought-after commodity, with a 2024 report by market research firm IDTechEx indicating global demand is expected to almost double in 10 years.
LNG, though criticised by environmental activists, is an important energy source in the global transition away from coal.
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