In South Africa, when Renergen spent $1 to acquire the gas exploration rights, they never imagined they would discover a helium deposit worth over $4 billion.
Renergen owns the exploration and production rights to 187,000 hectares of gas fields in Welkom, Virginia, and Theunissen in the Free State. Photo: Renergen
When the startup company Renergen bought exploration and production rights to some grasslands near Virginia, a town in South Africa's Free State province, its founders hoped to find a small natural gas deposit that could offer a mining opportunity. They paid $1 for the rights in 2013, according to CEO Stefano Marani, and began examining the composition of the gas flowing from two rusty drilling pipes installed years before the mineral exploration. What they discovered was an unusually high concentration of helium, CNN reported on January 4.
Helium has numerous commercial applications. When condensed into liquid form, it is an essential refrigerant used in the manufacture of microchips and in operating life-saving magnetic resonance imaging (MRI) scanning technology. However, global helium prices are volatile with unstable supply, as the gas is produced by fewer than 10 countries worldwide . Renergen is incredibly fortunate. Currently, the company reports helium reserves of over 198.2 million cubic meters at its Virginia Gas Project, valued at over $4 billion, and this could potentially increase to $12 billion if additional reserves are included.
Renergen successfully produced liquid helium from its plant for the first time in January 2023. After several delays throughout the year due to a leak in the vacuum seal of the helium cooler, they hope to begin commercial operations in February 2024, extracting helium along with natural gas, then processing and distributing it to customers such as Linde, a global engineering company.
This could make Renergen's helium more environmentally friendly, according to Chris Ballentine, head of geochemistry at the University of Oxford in the UK. Typically, helium is produced as a byproduct of liquefied natural gas (LNG), a gas mixture that is primarily methane. Only at concentrations of around 0.3% does direct helium extraction become economically viable. Thus, in most cases, the supply of helium is dominated by oil and gas producers, and their production activities are carbon-intensive. What makes Renergen's project noteworthy is that their helium production generates significantly fewer emissions.
Another advantage of high helium concentrations is lower production costs. "We produce helium at a much lower cost than most of our competitors on the market. We drill very shallow wells, perhaps around 305-457 meters, and the gas gushes up naturally," Marani shared.
The company's Phase 1 project is a small, government- funded pilot operation that will produce approximately 350 kg of helium per day, enough to meet South Africa's needs with a surplus. Phase 2, scheduled to become operational in 2027, will increase production to 4.2 tons per day, accounting for about 6-8% of the global helium supply. With the helium market projected to be worth over $6 billion by 2027 according to Research and Markets, that figure will generate significant revenue.
An Khang (According to CNN )
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