Emerging domestic natural gas and helium producer Renergen is pleased to announce the commencement of South Africa’s first ever Liquefied Natural Gas (LNG) auction. Interested parties are invited to apply to bid for the allocation of LNG, which will be produced from the company’s Virginia Gas Project, located in the Free State, approximately 250 km southwest of Johannesburg. Renergen holds the first and only onshore petroleum production right in South Africa.
With an average of greater than 95% methane and almost zero higher alkanes, Renergen will produce LNG of outstanding purity, placing the company’s product as the ideal substitute for liquid fuels, which will burn cleaner and release fewer emissions. Importantly consumption of LNG does not require significant changes to the infrastructure required for liquid petroleum gas (LPG), making the switch efficient and cost-effective.
Renergen is the first South African based company to supply LNG, and from domestic supply as opposed to other imported sources. By 2021, the company will complete its Phase 1 expansion plans of the Virginia Gas Project and will be producing LNG and helium. This major milestone will see Renergen become the first distributor of LNG at filling stations (in partnership with Total) in the country and the only domestic producer of helium.
Renergen anticipates that Phase 2 of the Virginia Gas Project will be available by 2023. The company expects demand for LNG to increase significantly across South Africa. Phase 2 production at the Virginia Gas Project will bolster the 2021 Phase 1 production, providing availability of LNG across all major highways in South Africa, with surplus volume to be made available to the market.
The positive characteristics of LNG is well-established globally, underpinned by an efficient, cost-effective, and clean energy source for transportation, power generation, and industrial use. LNG is the cleanestburning of all hydrocarbons and offers a less carbon-intensive substitute for South Africa’s existing transport fuel, thermal fuel, and power.
In addition, all interested parties will be required to sign a mutual confidentiality agreement, while all details relating to the auction will be kept confidential. Information relating to successful bids will also be kept confidential, including the identities of successful bidders, and will only be made public by mutual agreement.