Page 5 - AfrOil Week 42 2021

AfrOil COMMENTARY AfrOil

As a frame of reference, each unit of helium to estimates from Edison Group and Hannam
weighs 4.7 kg and comprises 37.5 litres when in and Partners.
liquid form. This is equivalent to 6mn of the units refer-
enced in the deal with Argonon.
Phase 2 gas project Renergen’s contract would cover only a
The deal will establish a mechanism for Rener- small amount of these volumes, but it has
gen to sell helium to Argonon in the spot mar- great potential to help develop the market,
ket when the Phase 2 plant becomes operational. according to Richard Charrington, the CEO
According to the South African company, up to of Argonon. “Whilst 100,000 units is less than
$25mn worth of helium sales from Phase 2 of 0.1% of the global helium market over the term
the Virginia gas project could potentially be of our contract, we believe this transaction is a
prefunded. ground-breaking step in bringing helium to the
The South African company is currently car- financial markets and will pave the way for its
rying out the first phase of the project, which inclusion into more mainstream commodities,”
encompasses the extraction of natural gas from he was quoted as saying in Renergen’s press
fields near Welkom, Virginia and Theunissen release. “Like with so many other commodities, The Virginia gas
in Free state and the processing of this gas into it will start small and is likely to be traded by
CNG. (The Virginia site contains the largest those who have researched it and understand project puts
amount of helium.) In the second phase, it will the future potential with emerging technologies
use this gas as feedstock for an LNG plant, which such as quantum computing and in time, may Renergen in a
is currently under construction. become much more mainstream in [a] similar strong position
Once the gas liquefaction plant comes on way [to what] lithium did several years ago.”
line, the company will halt production of CNG Charles Savage, the CEO of Purple Group to supply the
and switch to LNG. It has already arranged to Ltd, also touted the financial and technological
work with a unit of France’s TotalEnergies to sell potential of helium trading. “We see a future growing market
its LNG as a fuel for long-haul trucking. Total where the use of blockchain to manage assets
will use its filling stations along the Johannes- at low cost and in a transparent way becomes for helium
burg-Durban section of the N3 highway to dis- mainstream. This is what we do at EasyCrypto,
tribute LNG from the first phase of Renergen’s and it was a no-brainer when our long-time
plant. friends at Renergen asked us to get involved.
The second stage of the LNG plant will then Applying it to a resource base, we believe, is a
begin production in 2023. Part of the produc- very innovative approach and look forward to
tion from the second stage will be distributed this journey,” Savage said
by Total’s retail outlets along all of South Africa’s Meanwhile, Stefano Marani, the CEO of
major highways, and the remaining volumes will Renergen, described the deal with Argonon
be sold to other buyers. as important to his company’s future. “Helium
Renergen’s LNG plant will also include a is a rare element without substitutes and the
helium unit. Sproule, an international energy importance and critical role it plays across sev-
consulting firm, estimates that these sites may eral high-growth sectors – including medical
hold as much as 9.74bn cubic metres of helium, imagery (MRIs), welding, fibre optics and elec-
or more than the total proven reserves of North tronics – is leading to a growing global shortfall
America. of helium supply and rising prices,” he com-
mented. “Through the development of its world-
Global helium demand class, high-grade, Virginia gas project, Renergen
These reserves put the company in a position is in a strong position to supply this growing
to help meet global demand, which currently market and continue to create long-term value
amounts to 6bn cubic feet per year, according for all our stakeholders.” ™

(Image: Renergen)

Week 42 20•October•2021 www. NEWSBASE .com P5