Natural gas development company Renergen has signed an offtake agreement with Anheuser-Busch InBev (AB InBev) subsidiary South African Breweries (SAB) for the supply of liquefied natural gas (LNG) to power its delivery trucks.
The agreement sees the initial roll out of compressed natural gas to a small fleet of SAB trucks in the Gauteng area, using gas from Renergen’s Tetra4 operations, in Virginia, in the Free State.
This will be expanded to a significantly larger fleet to run on LNG once Tetra4’s plant reaches operational status in 2019.
“This agreement with SAB marks another large-scale South African logistics operation to use new age fuels. The use of LNG not only drastically reduces carbon emissions, but has the added advantage of improving the vehicle’s lifecycle maintenance and reduces the operator’s cost significantly.
“Renergen wants to remain a pioneer in alternative energy sources and is proud to be associated with SAB in such a landmark agreement,” said Renergen CEO Stefano Marani.
He pointed out to Engineering News Online that there is a global move away from diesel-powered trucks to LNG-powered trucks and that the company continues to discuss the benefits of LNG with some of the bigger fleet owners in the country.
In addition, Marani highlighted that AB InBev has announced aspirations to reduce its carbon footprint substantially, eradicating it almost entirely by 2025.
Marani said the transaction was “a move in the right direction” for AB InBev in this regard.
“It’s a landmark transaction in South Africa in the sense that this paves the way for other corporates to see that it’s time to look into the environmental and financial benefits of this move from diesel to LNG,” he added, noting that it is “a disruptive technology in the trucking space”.
The move, he elaborated, is the best of both worlds – not only do companies get to go green by reducing their carbon footprint, but companies are also saving money while doing it.
Under the right conditions, he advised, a carbon footprint can be reduced by up to 90% by running a truck on LNG as opposed to diesel.
Further, owing to a “massive supply squeeze in the helium market”, Marani explains that Renergen’s Tetra4 plant will not completely saturate global demand, which is currently at about seven-billion cubic feet a year.
Global supply currently stands at about six-billion cubic feet a year.
“Our Tetra4 plant’s reserve review estimates contingent helium reserves in the area to be up to 25-billion cubic feet, with the updated reserve review showing that the latest well drilled in the Virginia project contains a concentration of almost 11%, compared with the global average of 0.5%,” Marani adds, noting that this put’s Tetra4 in a “different league in the helium space”.
The production at this plant, he noted, will mean that South Africa is able to locally procure LNG and helium, instead of importing these gases.
All excess amounts of helium will predominantly be exported, owing to the anticipated depletion, in about 2020, of the US Bureau of Land Management’s (BLM’s) helium reserve, which is currently the largest supplier of helium globally.
Marani highlighted that, in an attempt to slow consumption, a US scientist has been pushing to have helium banned from being sold to the balloon market, as this will slow down consumption by about 5%.
“It would make a small difference, but it would help.”
He further warns that helium is non-renewable and irreplaceable, owing to its unique properties, which are unlike hydrocarbon fuels (natural gas or oil) in that there are no biosynthetic ways to make an alternative to helium.
The depleting resource, he laments, will impede technological advancements, unless an alternative metal, which can be turned into a super conductor without having to reach the same temperatures as helium, can be found.
Marani adds that, as it stands now, demand outstrips supply. One of the key uses for helium is in the medical industry and China’s growing middle class now demands further access to western healthcare, placing further pressure on demand.
This makes the helium discovery at Tetra4 in South Africa a globally significant one for the helium market.
Helium plays a role in nuclear magnetic resonance, mass spectroscopy, welding, fibre optics and computer microchip production, among other technological applications.
Additionally, US-based National Aeronautics and Space Administration, or NASA, uses large amounts yearly to pressurise space shuttle fuel tanks.
With space agencies in China renewing their vigour to land on the moon, and space agencies in India and Australia now coming on line, Marani warns that this will further affect the depleting global helium supply.