With diesel prices at a record high, liquefied natural gas (LNG) has the potential to lower the transportation costs of major logistics companies by up to 30%, LNG and helium developer Renergen CEO Stefano Marani said at the Junior Mining Indaba on June 1.
“This means that the conversion of their trucks from diesel to LNG has become a significant value proposition,” he said.
Renergen’s Virginia gas project comprises exploration and production rights of 187 000 ha of gasfields across Welkom, Virginia and Theunissen, in the Free State.
The source of the Virginia gas project’s natural gas is primarily microbial, originating from deep within the Witwatersrand Supergroup through groundwater circulating through large faults and contacting bacteria deep within the earth’s crust. This means the methane is a biogenic, and therefore renewable, resource.
Renergen is on track to become the first commercial supplier of LNG in South Africa, providing a secure independent energy supply, with significantly reduced carbon emissions compared with diesel in the same applications.
“We will distribute LNG [using] modular mobile refuelling facilities, which we will locate on vacant land to be leased on established trucking routes. By switching from diesel to LNG, customers will realise a meaningful cost saving and reduce their carbon tax [expenditure],” Marani said.
Renergen will sell its LNG product to domestic consumers, targeting primarily the South African transport industry.
The natural gas at Virginia also contains one of the richest helium concentrations recorded globally. The natural gas is very pure, with an average of over 90% methane and almost zero higher alkanes, which reduces the complexity of liquefication.
“Qatar supplies about 20% of the world's helium, and the concentration in their gas is 0.01%. Helium is 600 times more valuable than LNG, so it's worth it.
“The highest concentration on Earth on aggregate from any of the seven countries, aside from South Africa, that produce helium is the US . . . at 0.35%. Our average concentration [at Virginia] is 3.4%. We've even got some wells clocking in at 12%,” Marani pointed out.