Alternative and renewable energy business Renergen has appointed EPCM Bonisana as the engineering, procurement and contraction (EPC) contractor for its Virginia Gas Project.
EPCM, a subsidiary of EPCM Holdings, will be responsible for building the gas gathering system connecting the gas wells for the project.
The gas gathering system is a critical component to the project as it will reticulate all the gas to a centralised point for processing before the LNG and helium is moved to customers
The project will be developed over two phases, the first being the reticulation of the existing 12 wells, along with several new wells to be drilled in the coming months. This will result in the production of around 2,700 gigajoules of LNG and 350 kilograms of liquid helium per day starting in 2021.
The second phase is currently being planned and potentially involves the inclusion of the helium bearing sandstone trap discovered in the eastern side of the project area.
Significant data has been obtained and is being processed to assist in the planning of the first deviated well, which will determine the scale of helium production in the second phase.
gasworld caught up with Renergen CEO Stefano Marani to learn more about the Virginia Gas Project, how significant this will be for helium and what the next step forward for the project will be.
gasworld (GW): We thought we’d start by asking if you could tell us a bit about the Virginia Gas Project and how significant this will be for helium?
Stefano Marani (SM): The project is quite a unique project in many respects. There’s overwhelming evidence that the methane gas is bacterial in origin and we’re seeing strong signs of regeneration.
That makes it unique in one respect because the life of the mine is going to be significantly longer than if you have a trap that you deplete.
The second portion of the field that makes it quite unique is the concentrations of the helium that we see.
The average concentration across the proven reserve is around 3%, but we’ve discovered a sandstone trap in the eastern portion of the field where we are recording helium concentrations of up to 11%.
That’s contained in sandstone about 300 metres from the surface and has very good porosity and permeability.
The next phase for us now is to explore that sandstone and determine exactly how much of the helium reserve that we have at this 11% concentration.
GW: What kind of capacity are we talking about here, and will this be for the local market or wider regions?
In terms of the proven base case of the Virginia Gas Project, it’s meaningful in terms of LNG for the South African market.
The intention is to start to roll out LNG domestically for use in vehicles, particularly trucks and buses, as a substitute for diesel.
With regards to helium, the first production will be particularly small it’s not going to be a very large project, probably about 25,000 mcf per annum.
The second portion of the project, based on what we discover in the sandstone, has the potential to be particularly meaningful given the size of the sandstone body that we’ve discovered.
Phase I will exceed domestic consumption, which means there will be a remaining component which will then go to export. In that respect Phase I will certainly not solve the helium crisis, but it will help maybe one or two customers. Phase II is where the real export begins.
GW: How is the Virginia Gas Project progressing?
SM: After recently announcing the appointment of EPCM as the EPC contractor, the next step for us moving forward is to appoint the equipment manufacturer.
We’re also busy working on the conclusion of the final loan, after which we’ll announce the Overseas Private Investment Corporation (OPIC) loan, which will see us then go to construction and production based on the timeline we’ve given before – coming online in 2021 for both helium and LNG.
GW: Tell us a bit more about the EPC contractor you’ve just announced.
SM: We have a longstanding working relationship with EPCM having worked alongside each other since the very early stages of the Virginia Gas Project.
EPCM were responsible for the completion of the Pre-Feasibility assessment at Virginia, building the pilot compressed natural gas plant for Tetra4 in 2016 and assisting the Company with ongoing feasibility and engineering studies.
Importantly, EPCM share our goal of developing Virginia into a globally significant producer of LNG and helium.
GW: Anything else you’d like to tell us about?
SM: The milestones that I have described in terms of what we have achieved and what we’re going to achieve in the forthcoming weeks, are really about the Phase I portion.
We really see Phase I as a pilot project given the magnitude is not a particularly large amount of LNG, and it’s not a particularly large amount of helium.
What I would urge people to pay attention to is the drilling, which we’re hoping to be able to commence in the next few weeks, and it will be a lateral well that we drill through the sandstone.
If everything goes according to plan and we manage to get meaningful volumes out, this is when we believe the Virginia Gas Project has the ability to provide meaningful supply globally, through what we term the Phase Two portion.