OVERVIEW Oil and gas Gas
OVERVIEW Oil and gas Gas resources at Virginia are even bigger than first thought. Sproule, a resources accreditation agency, has given an updated report on the helium and methane reserves in the Virginia gas field, owned by Renergen subsidiary Tetra4. The results were even more positive than previous estimates, with helium reserves up by 620% and methane reserves by 427%. 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. A major milestone was achieved in July 2022 when ‘natural gas to plant’ was achieved. This test allows for the system to be comprehensively tested, with the inlet line from the gas-gathering system opened to the process plant and then on to the natural gas filtration and pre-compression system. The Covid-19 crisis has spurred Renergen to create something called Cyro-Vacc, a system of transporting and storing vaccines using helium that allows for up to 35 days where there might be no electricity available for cooling. 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. Methane has a strong potential for use in the transport sector. The logistics sector was first sector to respond to the potential of Virginia find. 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 also 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 SECTOR INSIGHT The life of the Natref refinery could be extended. 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 another 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 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. Natref refinery The Natref refinery in Sasolburg may have its life extended by the introduction of new technology. With every operator in fossil fuels under FREE STATE BUSINESS 2023 32
OVERVIEW The Virginia Gas Project has achieved a significant testing milestone. Credit: Renergen pressure to come up with cleaner methods, the joint operators of the refinery, Sasol and TotalEnergies, have announced that a new way of producing low-sulphur diesel is on the cards. As of July 2022, the Natref refinery was the only functioning South African refinery, so its strategic importance can not be underestimated. It is a technologically-advanced facility, which refines heavy crude oil into petrol, diesel, commercial propane, jet fuel and bitumen. The refinery has also started on 10-year emissions-reduction programme. 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 ONLINE RESOURCES Petroleum Agency South Africa: www.petroleumagencysa.com South African Oil and Gas Alliance: www.saoga.org.za South African Petroleum Industry Association: www.sapia.co.za 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 utilities and provides sitesupport services to enable the manufacturing processes taking place on site. The African Oil Blending Corporation (AOBC) has announced that it will spend R130-million on repurposing and upgrading its Harrismith lubricant blending facility. The new focus will be on producing water-based and monoethylene glycol-based coolants for the industrial and automotive sectors. The regulator and promoter of oil and gas exploration in South Africa, Petroleum Agency South Africa, has awarded coalbed methanegas 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. Tests have begun in the Karoo in search of shale gas. ■ 33 FREE STATE BUSINESS 2023
