Renergen Limited announced significant developments and achievements in its quarterly update. The highlights include securing a substantial loan for Phase 2 of the Virginia Gas Project and entering into an LNG offtake agreement. These milestones mark significant progress in Renergen’s efforts to advance clean energy solutions and decarbonize the logistics sector within South Africa.
Phase 2 Debt Funding and US DFC Approval
Renergen has successfully obtained funding for Phase 2 of the Virginia Gas Project, a natural gas field located in Virginia, South Africa. Following rigorous due diligence and assessments of Phase 1 construction, geological conditions, and market potential for helium and LNG, the cumulative loans of $750 million have received approval from the United States Development Finance Corporation (DFC). The loan approval process was completed after the necessary Congressional notification period, during which no objections were raised. The funding is subject to standard project finance conditions precedent, similar to those of Phase 1.
LNG Offtake Agreement with Timelink Cargo
Renergen has also secured a significant LNG offtake agreement with Timelink Cargo, a logistics operator. As part of their efforts to reduce carbon emissions, Timelink Cargo plans to convert a significant portion of their trucking fleet to run on LNG. Renergen’s LNG will be supplied to Timelink Cargo, with the commencement of supply anticipated in Q4 FY24. The agreement includes investments by Timelink in dual fuel conversion kits and by Renergen in associated LNG dispensing equipment required for installation at Timelink’s Johannesburg depot.
Production Operations and Increased LNG Output
Renergen reported a 12.8% increase in LNG production during the quarter, with 823 tons produced. This achievement follows successful performance testing of the LNG train, which has allowed the team to improve production efficiency. The upward trend in LNG output is expected to continue until the plant reaches full capacity in early 2024.
Helium Cold Box Commissioning and Morpheus Well
While preparing for helium performance testing, Renergen identified a defect in the helium liquefaction process, specifically in the helium cold box. The team discovered a leak in the vacuum circuit, which is currently under repair by the original equipment manufacturer (OEM). The repair work is being conducted off-site to ensure maximum safety and avoid contamination. The helium system’s performance testing is expected to resume in October 2023. The Phase 2 development of the Virginia Gas Project is unaffected by this process.
In addition, Renergen drilled a new well named Morpheus, located in the southern part of the Phase 1 wells footprint. The well has demonstrated promising results, producing helium with a concentration of 3.2% and a flow rate of 70,000 standard cubic feet per day. Further studies will be conducted to map the geology in this section of the field, enhancing Renergen’s underground geological model.