Commercialisation of South Africa’s first onshore Helium & Natural Gas field
Today (4 May 2016), The Linde Group, a world-leading gases and engineering company, its African subsidiary African Oxygen Limited (Afrox) and alternative energy company Renergen Limited, through its subsidiary TETRA 4 (Pty) Limited, signed an historic agreement for the commercialisation of the Free State Helium and Natural Gas (NG) field.
The 187,000 hectare Helium/NG field in Virginia, near Welkom, has proven reserves of 25 billion cubic feet of Natural Gas and Helium and is the first and only onshore petroleum (and natural gas) right in South Africa capable of supplying Helium to numerous specialised and industrial markets.
Under the agreement signed today, TETRA 4 has contracted the Helium under an offtake agreement with The Linde Group, via its Global Helium business, being assigned distribution rights for substantial reserves of Helium. JSE listed Afrox, a member of The Linde Group, will operate the plant and market the Helium.
“The discovery and commercialisation of the Free State onshore Helium source is great news for industry, healthcare and the South African economy as a whole,” said Afrox Managing Director, Schalk Venter. “The signing of this agreement marks an historic moment in bolstering South Africa’s self-sufficiency in terms of Helium production.”
Helium, although the second most abundant gas in the universe, is relatively scarce on earth and tends to be found trapped with NG in relatively low concentrations typically up to 1% by volume of the gas released. The Free State Helium and NG field, however, enjoys concentrations of up to 3-4% by volume.
Linde’s high-tech extraction technology will separate Helium from NG through a single system utilising a patented processing plant which purifies, compresses, liquefies and stores the Helium, ready for distribution to customers. The Helium plant will be designed and delivered by Linde Engineering and is expected to commence operations in 2018/19.
The Linde plant reduces the energy needed and cuts CO2 emissions of traditional Helium from NG extraction processes and represents the latest in engineering technology advances. The plant is of modular design and will be precision manufactured in Europe before being shipped to the Free State for fast and efficient construction.
Nick Haines, Head of The Linde Group’s Global Source Development, Global Helium & Rare Gases, said: “Linde has worked diligently to commercialise this unique Helium resource together with TETRA4 and looks forward to receiving Helium upon commencement of plant operations.”
Utilising the latest in land preservation techniques, TETRA 4 has drilled wells, thousands of feet deep to tap the NG source dome, while ensuring minimal visual and environmental impact on the gas field’s landscape. Wells and well-heads are being interconnected underground via an intricate network of pipes. These pipes will feed directly into the Linde engineered Helium processing plant.
As part of TETRA 4’s commitment to social regeneration, the company has created a number of bursaries for local students in the Virginia/Welkom area and has refitted the local Stilte Primary School with classrooms, furniture, a solar borehole pump, and upgraded the children’s play area. TETRA 4 also plans to supply the local operations of MegaBus with compressed natural gas, (CNG) as ‘green’ fuel for its local bus services.
Renergen Chief Executive Officer, Stefano Marani, said: “Today is indeed an important milestone as we embark on the beneficiation of this important Helium deposit for the benefit of all our stakeholders.”
NOTES TO THE EDITOR:
Helium and its usages:
Liquid Helium has a boiling point of approximately -269 degrees C, and is the only substance that can be practically used for deep low temperature refrigeration.
• Liquid Helium is used to cool the superconductive magnets in MRI (Magnetic Resonance Imaging) for a wide use in medical diagnostic purposes.
• Helium is used extensively in the welding industry as an inert shielding gas for arc welding.
• Used in various type of gas lasers as a buffer or carrier gas
• Used in mixture with neon and argon for filling electronic tubes - neon signs
• Various mixtures of helium and oxygen used as breathing gases for divers
• Used to fill large balloons for upper atmosphere and cosmic ray studies - smaller balloons used by weather forecasters
• Due to non-flammability and low density it is ideal for filling toy balloons,
• Used as a calibration gas and to balance gas calibration mixtures
NG and its uses:
Natural gas is a versatile, clean-burning, and efficient fuel that is used in a wide variety of applications. There are so many different applications for this fossil fuel that it is hard to provide an exhaustive list of everything it is used for:
• NG in its gaseous state is used across the residential, commercial and industrial sectors for purposes as diverse as heating, cooking, generating electricity and manufacturing a wide variety of products.
• NG is also used as a fuel for heavy-duty and other vehicles.
About the formation of the Free State, Virginia, NG field:
This field was created at the same time as the nearby World Heritage Site Vredefort Dome by the impact of a gigantic meteor. The meteorite impact happened about 2 billion years ago and the resultant helium present today was created by the natural radioactive decay of heavy radioactive elements (thorium and uranium). This radiogenic helium is trapped with natural gas in concentrations up to 7% by volume.
African Oxygen Limited (Afrox)
African Oxygen Limited (Afrox) is a leading supplier of gases and welding products in sub-Saharan Africa. Established in South Africa 85 years ago, the company listed on the JSE in 1963, followed by a dual listing on the Namibian Stock Exchange in 1995. Afrox employs 2 336 people across its business and has its head office in Johannesburg. Afrox’s ultimate parent company is The Linde Group. Afrox operates in South Africa and in 10 other African countries. In these markets Afrox supplies a wide range of customers drawn from sectors as diverse as mining, manufacturing, heavy industry, healthcare and hospitality. In addition, within the sub-Saharan markets in which it is active, Afrox manages five operations on behalf of The Linde Group. For more information visit www.afrox.co.za
The Linde Group:
In the 2015 financial year, The Linde Group generated revenue of EUR 17.944 bn, making it one of the leading gases and engineering companies in the world, with approximately 65,000 employees working in more than 100 countries worldwide. The strategy of The Linde Group is geared towards long-term profitable growth and focuses on the expansion of its international business with forward-looking products and services. Linde acts responsibly towards its shareholders, business partners, employees, society and the environment in every one of its business areas, regions and locations across the globe. The company is committed to technologies and products that unite the goals of customer value and sustainable development. For more information, see The Linde Group online at www.linde.com
Renergen is the first JSE-listed Alternative Energy company and participates in the alternative and renewable energy sectors in South Africa and sub-Saharan Africa in particular. It recently acquired Molopo South Africa Exploration and Production, now TETRA 4, the first and only holder of an onshore petroleum production right in South Africa. For more information visit www.renergen.co.za
Stefano Marani CEO Renergen & Schalk Venter CEO Afrox