As Phase 1 of the Virginia Gas Project in the Free State has been a benchmark for South Africa’s gas economy, Phase 2 of the project is expected to catapult South Africa to becoming one of the largest helium supplying countries in the world, amid a global shortage of helium.
It was pioneered by the CEO of natural gas and helium producer Renergen Stefano Marani describes the Virginia gas project as the “foundation for the growth of South Africa’s liquefied natural gas (LNG) industry”, with Phase 1 having already brought in two major first-tier customers: subsidiary Italtile Ceramic Industries and Ardagh Glass.
“Following the success of Phase 1, we have been inundated with requests for LNG access in Phase 2. It is only a matter of time before South Africa’s LNG consumption is in line with many other economies “, he enthuses.
Construction of Phase 2 will be completed in 2025/6 and is expected to produce around 11.7 million gigajoules of LNG per year, equivalent to producing around 330 million liters of diesel per year.
Meanwhile, by pioneering the adoption of LNG in South Africa, Marani hopes the project will drive more competition between companies in the local gas sector, which will benefit the local economy by increasing competition in the liquid segment of the gas market natural
However, he notes that the Virginia gas project will not be able to produce the volumes needed for export, due to the high concentration of helium in LNG.
However, LNG does not require pipelines to reach the end user and can be stored well, making it more valuable than pipeline gas as it is more suitable to be transported and exported by road or sea.
“We have an advantage in this regard and domestic demand for LNG will always exceed our supply, due to the restriction of helium at the upper production limits,” he says.
LNG has been accepted as the most viable fuel to help the global transition to net zero, as it is clean, quick to bring online and provides baseload power around the clock.
Marani points out that LNG is the only viable alternative to diesel in terms of reduced emissions and lower running costs. It can also be used in power plants, operating from megawatts to gigawatts, with a smaller carbon footprint than coal.
“South Africa is starved for energy and we need to start making smart decisions about how to stop the economy. There is no silver bullet and we all need to play our part, whether it’s to be more energy conscious and improving our energy efficiency at home, or finding ways to add energy to the country’s energy mix. We all have a role to play,” he concludes.
