The share price in Renergen, the operator of South Africa’s only onshore producer of LNG and helium at a site in Virginia in the Free State, yesterday leapt 4.08% after it reported that it had resumed the production of helium this week.
By 4.30pm the share was at R10.20 on the JSE.
Renergen said it had completed the relevant shutdown, checks, calibrations, and corrective actions and has restarted the facility and resumed liquid helium production as of June 4, 2024.
In May the company told its shareholders that since April 2, the Original Equipment Manufacturer (OEM) had brought the helium cold box to the appropriate temperature to liquify helium in batches from its wells.
This process involved the purification of the helium to a level of 99.999% purity, which was validated by an independent third-party laboratory. The liquid helium produced was being used to cool the remaining components of the helium train, such as tanks and pipes, to approximately -269 degrees Celsius.
“The OEM contractor must now demonstrate that they are operating the entire plant at desired temperature, pressure, and production flow parameters before the contractor is allowed to commence final contractual obligation of completing a Performance Test. The Performance Test is envisioned to run over a period of seven days and will measure several critical criteria that span recoverability of product, purity of product, and overall utility efficiency to ensure the plant performs in accordance with the original design specifications,” it said.
Helium produced during this period would be kept in storage for supply to Renergen’s customer.
Furthermore, Renergen said it had appointed two independent helium consultants to bolster its team’s skill set for operation once the Performance Test was complete and the plant had been handed over.
The consultants had a cumulative of several decades of experience in commissioning and running liquid helium plants around the world, in countries including Algeria, Australia, Poland, Qatar, Russia and the US.
“These consultants have already had the opportunity to engage and review the relevant design data of our process plant and assess the overall progress of the commissioning team on the front-end part of the process thus far. They have indicated that no fundamental issues are likely to exist with the plant, as we have successfully liquified helium from raw gas with proven repeatability, and further confirmed that the processes currently being followed are standard commissioning procedures for a helium plant,” Renergen said.
Renergen has been at the receiving end of a lot of flak from some of the investor community, who claim that the delays and other problems belie a project that is at its heart not likely to be commercially viable.
This has seen its share price tumble 37.58% in the year to date.
Urging investors to be patient, Renergen’s CEO, Stefano Marani said, “We acknowledge it has taken longer than originally planned to reach this step, but ensuring the safe operation of the plant is our main priority right now. The progress achieved to date puts us among only a few companies globally to achieve this status.
“It is too easy to focus on the larger milestones and ignore smaller ones, but we should not lose sight that we will shortly own and operate one of approximately less than 20 liquid helium production facilities globally,” he added.
Marani further said, “We would like to assure our stakeholders that everything is being done to conclude the commissioning timeously while ensuring long-term longevity of the overall plant and consistency of production for years to come.”
Renergen is planning to list on the Nasdaq index so it can begin operation Phase 2.
BUSINESS REPORT