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Free State Business 2022

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OVERVIEW Oil and gas The

OVERVIEW Oil and gas The Virginia Gas Project will join a small global elite in 2022. In 2021 there were 15 places in the world in just seven countries that produce helium. In 2022 those numbers will increase to 16 and eight when Renergen’s Virginia Gas Project (pictured) comes on stream. The SpaceX rocket that launched in 2021 used 11 tons of helium to propel itself off the ground. Every computer microchip in the world is produced in the presence of helium and the world uses 85 tons of it every day. Although it’s a very useful element, it’s also a very difficult element. The result of that is that Renergen, the owner of the Tetra4 company that holds the first and only onshore petroleum production right issued by the Department of Mineral Resources and Energy (DMRE), has had to import much of its equipment and many of the skilled personnel it needs to commercialise the gas field. The field covers 187 000ha in the region of Virginia, Theunissen and Welkom. Hiring has increased rapidly since 2019 as the project ramps up from the first phase in which a pilot compressed natural gas (CNG) plant was constructed in 2016. The second phase encompasses liquid natural gas (LNG) and helium. Production of helium is expected to grow from 350kg per day to five tons in the second phase. The first sector to respond to the potential of this gas find was the logistics sector. Bulk Hauliers International Transport (BHIT) has signed an agreement to take LNG to fuel 50 of its trucks, which should lead to lower operating and maintenance costs. South African Breweries is another client. Renergen has signed an agreement with TotalEnergies for distribution and sales. Renergen intends equipping filling stations with LNG at strategic locations across South Africa to cater for the logistics industry. The first two such stations will be Total stations in Johannesburg and Durban that will be rebranded in green. One station is planned for Harrismith on the busy N3 highway which links these two cities. The potential of a second market was revealed in 2021 when Renergen agreed to sell LNG to glass manufacturer Consol. Bespoke depots will be developed to cater to industrial clients such as Consol. Tetra4 has a R218-million loan from the Industrial Development Corporation to build a 107km pipeline network from Virginia and the Overseas Private Investment Corporation (OPIC), an agency of the US government, will lend Renergen -million (more than SECTOR INSIGHT A national gas distribution network is being established. R600-million) over 12 years to build a gas plant in the Free State. The area around Virginia has proven reserves of 25-billion cubic feet. The chemical complex at Sasolburg is the economic driver of the oil and gas sector for the province. One of the Sasol companies at Sasolburg, Sasol New Energy, is moving the group away from reliance on fossil fuels. In 2020 Sasol called for bidders construct an embedded 10MW solar PV facility at Sasolburg. The company’s larger goal across all its sites is eventually to procure 600MW of renewable energy and achieve a 10% greenhouse-gas (GHG) emission reduction by 2030. Sasolburg Operations is one of the five operating hubs that forms part of the Southern African Operations and is a 100%-owned facility. Sasolburg Operations includes all operations on the Sasol One and the Sasol Midland sites. The integrated manufacturing facility is responsible for the production of base and performance chemicals. It also produces electricity and other FREE STATE BUSINESS 2022 38

OVERVIEW ONLINE RESOURCES Petroleum Agency SA: www.petroleumagencysa.com South African Oil and Gas Alliance: www.saoga.org.za South African Petroleum Industry Association: www.sapia.co.za utilities and provides site-support services to enable the manufacturing processes taking place on site. Sasol has been running a Research and Technology facility at the Sasol One Site in Sasolburg for a decade. Comprising 14 laboratories, analytical equipment, pilot plants, offices and maintenance workshops, the facility is run by Sasol Technology and offers the group’s scientists and engineers space to work on new technologies and efficiencies. Sasol’s technology expertise includes coal and gas-processing technologies, Fischer-Tropsch catalysis and engineering research, refinery and fuels technologies, chemical technologies, environmental sciences and engineering, and alternative energy and advanced analytical solutions. The regulator and promoter of oil and gas exploration in South Africa, Petroleum Agency South Africa, has awarded coalbedmethane-gas exploration rights in KwaZulu-Natal and natural gas exploration permits in the Free State. Early surveys suggest that the Free State has 23-billion cubic feet of gas underground. If this is confirmed, then four new power stations could be built in the province. Tests have begun in the Karoo in search of shale gas. The Natref fuel refinery is one of only four in South Africa, and the country’s only inland refinery. The refinery is a joint venture between Sasol Oil (63.6%) and Total SA (36.3%). It is a technologically advanced facility, which refines heavy crude oil into petrol, diesel, commercial propane, jet fuel and bitumen. ■ 39 FREE STATE BUSINESS 2022

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