Renergen’s Phase 1 plant is on schedule to bump up production of liquified natural gas, South Africa’s only onshore gas exploration and production company said in an update for the quarter to end-August.
In what proved a busy three months for the company to end-August, the Central Energy Fund also successfully completed due diligence on a proposed acquisition of 10% of Renergen subsidiary Tetra4 Proprietary.
Two additional wells: Han, which was drilled during the quarter and Don Vito, were being completed as gas producers.
Aeromagnetic and gravity surveys had been completed and were being interpreted. Seismic data was being re-processed to improve the imaging of potential gas-bearing structures.
“To date, significantly more targets than anticipated have been identified,” the company said.
CEO Stefano Marani said: “Further work is required before any of these data will be useable in the field, but this is a welcome surprise and could be quite a positive outcome for us from a geological perspective.”
The Virginia Gas Project started production of the country’s first commercial LNG on September 5, 2022, and from September 19 the plant began operating 24-hour shifts.
Production had started at around 1 000 GJ (gigajoule) per day, to be stepped up to 1 400 GJ in a month. From there the intention is to ramp it up to 2 500 GJ (some 50 tons) per day, by the first quarter next year.
During the quarter ended August 31, there was no material production activity.
The helium module was the next part to be commissioned, with ongoing testing of components in the helium liquefier. No mechanical faults had been identified at this stage, and the tests were expected to be completed in due course, the company said.
The Central Energy Fund and Renergen signed a term sheet for a R1 billion investment into the Virginia Gas Project in return for a 10% stake in Tetra4, with the deal anticipated to close in 2023. The process, following the completion of the due diligence on September 10, of obtaining approval from stakeholders and completion of final agreements was progressing well, Renergen said in the update.
The Han well was drilled to 624 metres, striking gas of about 80 000 standard cubic feet (scf) per day. Drilling had been halted to log the well to delineate the gas bearing features in the well.
The Don Vito well, drilled in June 2021 as a vertical pilot hole, was examined during the quarter and commenced flowing gas. The well was producing about 75 000 scf per day. The hole was being completed for production before being connected to the pipeline.
Gravity and aeromagnetic surveys, with seismic data reprocessed during the quarter, were showing increased prevalence of prospective sub-surface structures which, if gas-bearing, would have the potential to materially increase gas production capacity.
BUSINESS REPORT