Several major industry companies have signed an historic agreement today for the commercialisation of the Free State Helium and Natural Gas (NG) field near Welkom in South Africa.

Tier One player, The Linde Group, and its African subsidiary, African Oxygen Limited (Afrox), along with alternative energy company, Renergen Limited, and its subsidiary TETRA 4 (Pty) Limited, have all united under the contract, which will see the project commence operations in 2018.

Under the contract, Renergen will supply Linde with helium (He) reserves via an offtake contract, with the German corporation’s Global Helium unit being assigned the distribution rights for substantial reserves. It is understood that Afrox will operate the plant and market the He. 

Formation of the field

The 187,000-hectare helium (He) and NG field in Virginia, Free State province, is the first and only onshore NG production site in the country and has proven reserves of 25 billion cubic feet of both gases. It boasts a high concentration level of He – usually up to 3-4% by volume.

The Free State Helium and Natural Gas field was originally created by the impact of a gigantic meteor which struck about 2 billion years ago. The resultant He present today, which is trapped with NG in concentrations of up to 7%, was formed by the natural radioactive decay of thorium and uranium.

Linde’s Engineering Division will provide the processing plant, which will be designed and manufactured in Europe before being shipped to South Africa. The patented extraction technology used in the plant is a single system which separates the He from the NG and then purifies, compresses, liquefies and stores it ready for distribution.

Renergen’s role in the arrangement saw the company drilling deep wells to tap into the NG source dome whilst ensuring minimal visual and environmental impact on the gas field’s landscape by utilising land preservation techniques. These wells are being linked underground to feed directly into Linde’s processing plant.

Today is indeed an important milestone as we embark on the beneficiation of this important He deposit

Stefano Marani, CEO of Renergen, enthused, “Today is indeed an important milestone as we embark on the beneficiation of this important He deposit for the benefit of all our stakeholders.”

Nick Haines, Head of Global Source Development, Global Helium and Rare Gases at Linde, underlined, “Linde has worked diligently to develop this unique He resource together with Renergen and looks forward to receiving He upon commencement of plant operations. Along with our He sources in US, Qatar, Australia and Algeria, this supply agreement re-confirms Linde’s position as the supplier with access to the most diversified He source portfolio.”