Clock is ticking on Renergen helium production as stock tumbles
19 Jun 2024
As of its 11 June announcement, Renergen says it is still on track to become a significant player in the global helium market. The company resumed liquid helium production at its Virginia Gas Project last week, following a series of technical challenges and delays. Unfortunately, traders are growing weary as the company share price hovers around its historic lows.
Aerial view of Virginia Gas Project Phase 1
The Virginia Gas Project is unique due to its geological location within the Vredefort Dome asteroid crater, resulting in natural gas with one of the richest helium concentrations recorded globally.
With an average concentration of 3%, and over 800Mt of Helium reserves, the project holds immense potential.
Renergen initially achieved a major milestone in January 2023, producing its first liquid helium. However, progress was hampered by a leak discovered in the liquid helium cold box in June 2023. This setback required the cold box to be repaired off-site, causing delays in the project timeline.
Despite these challenges, Renergen remained committed to resolving the issue and resuming production. The cold box was successfully repaired and reinstalled, and by December 2023, the company had recommissioned the system and produced helium once again.
There were no helium sales during the last financial year as the helium module was not fully commissioned. The company is working to optimise helium production capacity and ramp up to full commercial production in the 2024 financial year.
More helium delays
Further delays were encountered in early 2024 due to the late arrival of the Original Equipment Manufacturer (OEM), who was needed to finalise the integration of the helium system and conduct performance tests.
However, by May Renergen had successfully produced liquid helium and commenced performance testing.
Renergen announced that it has officially resumed liquid helium production. The OEM is currently conducting final performance tests to ensure the plant can operate at the desired specifications. All helium produced during these tests will be stored for customer use.
"We acknowledge it has taken longer than originally planned to reach this step, but ensuring the safe operation of the plant is our main priority right now,” said Renergen's CEO, Stefano Marani in a statement.
“The progress achieved to date puts us amongst only a few companies globally to achieve this status."
Renergen was one of the only South African companies to not gain positive market movement post-election. But with liquid helium production now underway, the company is well-positioned to capitalise on the growing demand for this valuable resource.
