Renergen has completed geological surveys showing potentially larger reservoirs than originally anticipated, the owner of South Africa’s first onshore gas production site said in a quarterly update Friday.
A due diligence was being completed for Phase 2 funding with US DFC and Standard Bank, finalising credit submissions.
On the geological surveys, the group said full 3D modelling and inversions of gas bearing features have been completed, the results of which were being incorporated into an updated 3D geological block model.
In addition to magnetic data collected, the gravity gradient data had indicated further areas of interest within the field, specifically a series of low-density areas.
“These low-density features, mainly attributable to previously undiscovered faults that are potentially gas bearing, are more numerous than previously thought and of significant extent, which may indicate a larger reservoir than previously estimated,” the group said.
Meanwhile, a new gas strike was struck in January called Jabba, and the well was producing helium at 1.6% helium, with strong flow. The drilling and casing of the well cost R3 million.
“We have now drilled 5 successful wells within 100 metres of each other, and there is no indication that the wells are communicating,” the group said.
This is a significant development as our Reserve Report assumes a 300-meter spacing between wells, but this data is indicating the potential that we may be able to drill more wells in the faults.”
Construction and commissioning of an approximate 33Kv overhead line and corresponding substation grid connection was executed. The project was now complete.
Given the line was connected to a main 132kV line and priority substation, it was not susceptible to load shedding, the group said.
The construction and commissioning of the gas gathering pipeline which includes approximately 60 kilometres of pipeline, 16 wellhead connections and two booster compressor stations was complete, in operation and running.
The LNG system including pre-treatment modules achieved initial production in September 2022. “Our team is now running the LNG system independently of the OEM.”
The team commenced commissioning of the helium system and achieved liquid helium production on January 22, 2023.
Two facilities for the delivery and gasification of LNG had been constructed on behalf of customers. The commissioning for Ceramic Industries was achieved in October 2022 and Ardagh Glass Bottling in November 2022. Both projects were complete.
Phase 2 entailed drilling of additional gas wells, construction of additional gas gathering pipelines and construction of a larger processing and liquefaction facility as well as the associated road tanker distribution and downstream customer dispensing facilities.
The due diligence and funding process advancement with the US Development Finance Corporation and Standard Bank South Africa for a combined US$ 750 million was being completed and were now preparing for credit submissions
The share price closed 2.46% lower at R18.64 on Friday, having fallen from R42.10 a year ago.
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