Page 8 - GLNG Week 42 2021

GLNG COMMENTARY GLNG

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

PROJECTS & SOUTH African natural gas and helium pro- between refinery price and the current spot
COMPANIES ducer Renergen has signed a helium forward price,” it added.
sale agreement with a helium trading company, Following the forward sale of the first 100,000
WHAT: Argonon Helium US, covering the delivery of units of helium, future transactions between
Renergen has signed 100,000 units over a period of 19 years. Renergen and Argonon will follow a pricing
a helium forward sale Renergen, an emerging energy producer that formula that sets the value of the gas at the spot
contract with Argonon. holds licences for several natural gas fields in market of helium minus Argonon’s trading mar-
Free state, hopes the deal will enable investors gin. This formula will remain in effect until the
WHY: to trade in the inert gas and thereby improve expiry of the Virginia gas project licence in Sep-
Helium sales will begin price transparency in the market, which is now tember 2042.
when Renergen switches mostly opaque. The arrangement is designed As a frame of reference, each unit of helium
from CNG production to to facilitate the creation of a liquid spot market weighs 4.7 kg and comprises 37.5 litres when in
gas liquefaction. for helium that will be accessible to all investors liquid form.
through the Argonon platform, the company
WHAT NEXT: said in a statement dated October 18. Phase 2 gas project
The deal is designed Each unit of helium sold under the agreement The deal will establish a mechanism for Rener-
to help establish spot represents 1,000 cubic feet (28.32 cubic metres) gen to sell helium to Argonon in the spot market
market for helium, of helium at 99.999% purity and in liquid form. when the Phase 2 plant becomes operational.
which is becoming an Argonon will take possession of the units once According to the South African company, up
increasingly important they are paid for, Renergen said. to $25mn worth of helium sales from Phase 2
(and scarce) commodity. Argonon intends to use the units to estab- of the Victoria gas project could potentially be
lish a spot market for helium. It will “use the prefunded.
helium to issue tokens, which will in due course The South African company is currently car-
be listed on an exchange with the assistance of rying out the first phase of the project, which
[the South African] financial services provider encompasses the extraction of natural gas from
Purple Group Ltd’s EasyCrypto platform,” fields near Welkom, Virginia and Theunis-
the statement noted. “The tokens will be fully sen in Free state and the processing of this gas
redeemable for helium at the plant, giving inves- into CNG. (The Virginia site contains the larg-
tors the ability to participate in the difference est amount of helium.) In the second phase, it

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