Page 4 - AfrOil Week 42 2021

AfrOil COMMENTARY AfrOil

(Photo: Renergen)
Renergen deal could help

establish helium spot market

The South African company is set to begin trading helium once its LNG plant comes on stream

SOUTH African natural gas and helium pro- units once they are paid for, Renergen said.
ducer Renergen has signed a helium forward Argonon intends to use the units to establish
WHAT: sale agreement with a helium trading company, a spot market for helium. It will “use the helium
Renergen has signed Argonon Helium US, covering the delivery of to issue tokens, which will in due course be listed
a helium forward sale 100,000 units over a period of 19 years. on an exchange with the assistance of [the South
contract with Argonon. Renergen, an emerging energy producer that African] financial services provider Purple
holds licences for several natural gas fields in Group Ltd’s EasyCrypto platform,” the state-
WHY: Free state, hopes the deal will enable investors to ment noted. “The tokens will be fully redeem-
Helium sales will begin trade in the inert gas and thereby improve price able for helium at the plant, giving investors the
when Renergen switches transparency in the market, which is now mostly ability to participate in the difference between
from CNG production to opaque. refinery price and the current spot price,” it
gas liquefaction.
The arrangement is designed to facilitate the added.
creation of a liquid spot market for helium that Following the forward sale of the first
WHAT NEXT: will be accessible to all investors through the 100,000 units of helium, future transactions
The deal is designed to
help establish spot mar- Argonon platform, the company said in a state- between Renergen and Argonon will follow
ket for helium, which is ment dated October 18. a pricing formula that sets the value of the gas
becoming an increasingly Each unit of helium sold under the agree- at the spot market of helium minus Argonon’s
important (and scarce) ment represents 1,000 cubic feet (28.32 cubic trading margin. This formula will remain in
commodity. metres) of helium at 99.999% purity and in liq- effect until the expiry of the Virginia gas project
uid form. Argonon will take possession of the licence in September 2042.

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