Renergen, the JSE-listed company operating South Africa’s first onshore helium and liquefied natural gas (LNG) field, said LNG production increased by a substantial 88% to 1 564 tons in the second quarter over the same period last year.
“We have seen consistent production increases quarter-on-quarter,” CEO Stefano Marani said in a quarterly update on Friday.
The share price was up only 0.17% to R17.28 on Friday afternoon after the release of the update. Year-on-year, the price has increased 40% as production starts to ramp up at the company.
The big second-quarter LNG increase was attributed to fewer plant interruptions and breakdowns, as was typically experienced when commissioning a new facility.
“We expect this rate of production to remain stable until the next jump in production as we ramp to full-scale production in due course,” Marani said.
Meanwhile, the helium cold box had been repaired, with only re-installation and recommissioning remaining to complete, prior to commencement of tank filling and ultimately the performance test.
“The team is focused on achieving our most critical milestone, the turn-on and production of liquid helium. Subsequently, we will initiate the tank-filling process, leading to the final performance test, which will signify the unit’s readiness for handover from an engineering perspective,” said Marani.
He anticipated the performance test will be completed in November 2023.
He said the repair had not impacted progress on the Virginia Gas Project’s Phase 2 project.
Another highlight through the second quarter was the environmental authorisation that was received for the Virginia Phase 2 Gas Project.
Phase 2 aims to substantially increase production and entails drilling additional gas wells, constructing additional gas-gathering pipelines and a larger processing and liquefaction facility, as well as the associated road tanker distribution and downstream customer dispensing facilities.
In terms of exploration in the second quarter, the integration of seismic and aero-magnetic data revealed new gas anomalies, and these were being correlated to the structures that had been identified from previous drilling campaigns.
Two new wells spudded and showed signs of gas prior to reaching the target depth of 650m.
BUSINESS REPORT