Renergen’s first production of liquid helium saw the share price of the country’s first onshore gas producing company rise by 8.3% to R26.80 on the JSE yesterday morning.
The JSE and Australian stock exchange listed company said in a statement yesterday that the first production at its Virginia Gas Project made it the world’s newest producer of liquid helium.
“The helium module is now operational and being optimised,” the company said.
The news appeared to be well received by shareholders considering the share price recently lagged after investor scepticism about initial delays in getting the project into first production.
The share price traded at R26.80 yesterday morning, lower than the R35.80 that it traded at the same day a year ago, and much lower than the more than R42 it traded at in November last year.
The project’s first liquid natural gas was produced in September last year, but the helium production is more valuable for the project because of its relatively scarcity in the world.
“Having the helium plant in operation and producing liquid helium is a truly spectacular achievement by the team who went above and beyond to achieve the major and critical milestone,” Renergen chief executive Stefabo Marani said.
He said all components of the Phase 1 plant were now in operation, “and South Africa joins the ranks of only 8 countries in the world to produce this rare and valuable liquid”.
Helium has a range of industrial uses, such as in the making of fibre optics and semiconductors, and for arc welding and to detect leaks.
With Renergen a favoured stock among many retail stock exchange investors, the announcement of the first helium production also generated some social media comments yesterday.
For instance, @BlueGemResearch tweeted on Twitter: “Renergen: First liquid helium produced at Virginia Phase One: an exceptionally important derisking moment as the group shifts from developer into producer.”
@AffSe tweeted: “Renergen – starting the trading week with a bang (inert gas a bang?) as first helium production is announced, Share should open strong next few minutes.”
The group said on its website: “Our natural gas contains one of the richest helium concentrations recorded globally. The natural gas is also very pure, with an average of over 90% methane, and almost zero higher alkanes, which reduces the complexity of liquefaction.
"Furthermore, our natural gas offers a less carbon-intensive substitute for South Africa’s existing transport fuel, thermal fuel and power."
BUSINESS REPORT