The towns of Welkom, Virginia and Theunissen in the northern Free State used to be known as gold-mining towns. These settlements along the R30 road that runs north from Bloemfontein used to support a thriving gold extraction industry, but today it is natural gas that has brought investors to the area.
Exploration rights to the Virginia area were granted to a company which later became Tetra4, a wholly-owned subsidiary of Renergen. The production right area covers 187 000 hectares and was first issued in 2007. As of 2024, this remains the only onshore petroleum production licence so far issued by the Department of Mineral Resources and Energy through Petroleum Agency South Africa (PASA).
Liquid natural gas for the domestic market and helium for export from this project will create an entirely new stream of energy options and represents an exciting future avenue for downstream economic sectors and employment. In 2012 a full onshore petroleum production right was awarded and a full Environmental Impact Assessment was completed in 2017.
In July 2022 a milestone called “natural gas to plant” was achieved. Later in 2022, commercial operations of the company’s LNG plant began and in January 2023 the announcement was made that helium production had begun.
Investment momentum
In the early stages of the project, it took nine years to find the R1.2-billion needed to fund the first phase of the Virginia Project. More recently, an amount of R3.6-billion has been invested by Ivanhoe Mines to secure some offtake rights and the Central Energy Fund has purchased a 10% stake in Tetra4 for R1-billion.
Sproule, a resources accreditation agency, has given an updated report on the helium and methane reserves in the Virginia gas field. The results were even more positive than previous estimates, with helium reserves up by 620% and methane reserves by 427%.
Every computer microchip in the world is produced in the presence of helium and the world uses 85 tons of it every day.
Bulk Hauliers International Transport (BHIT) was among the first logistics companies to sign an agreement to take LNG from Tetra4. With the transport sector contributing significantly to pollution, the potential for transformation through these measures is enormous.
Renergen has signed an agreement with TotalEnergies for distribution and sales of LNG. One station is planned for the eastern Free State logistics hub of Harrismith on the busy N3 highway which links these two cities.
Other manufacturing concerns such as SA Breweries and Ardagh Glass Packaging have also signed up to take LNG. Bespoke depots will be developed to cater to industrial clients such as the glass company. The total allocated to gas-to-power in the national power plan is 3 726MW, of which 3 000MW is for LNG.
Investment Enquiries
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