Financing for oil and gas projects remains one of the major hurdles in developing the sector in South Africa.According to Stefano Marani, CEO of Renergen, a dual-listed helium and natural gas company with substantial gas reserves in the Free State, and the holders of South Africa’s only onshore petroleum production right at present, raising capital remains incredibly difficult in the current economic environment – even for viable projects.Renergen in September this year switched on South Africa’s first onshore gas facility producing liquid natural gas (LNG).The Virginia Gas Project has been years in the making and has transitioned Renergen from an explorer to a producer.“The project is the tenure of our success and it involved a lot of hard yards,” says Marani. “This is coming from the point that we had production rights in 2012 already. Most of the onshore hopefuls in the country don’t have rights yet. Getting early-stage capital when you don’t have a clear path to getting production rights is a monumental challenge.”According to Marani, Renergen bought the Virginia Gas Project with the production rights already secured. The project alsohas the highest concentration of helium on the plant.“In 2018 helium was the second most critical element on earth. This saw us getting the very necessary funding to move our project forward.”The investors, however, were all international. “These kinds of oil and gas projects are not getting financing locally. Raising financing in a country that does not understand oil and gas has been very difficult. This is not child’s play. It requires very progressive forward-thinking.”For Marani, the journey to date has only been the start of the process. His goal is to see the company become a global player in liquid helium supply and a material local supplier of much-needed L NG.”He describes Virginia as a world-class project. It is currently producing 1000GJ LNG daily and plans are in place to more than double this by the first quarter of next year.He says one of the benefits of the project has been its specific geography. “This has allowed us to use the borehole equipment that gold mines use. Considering that equipment availability is in short supply it has been very benef icial.”It is extremely unusual for this type of equipment to be used in oil and gas. “The reality, however, is that with any project, challenges can be solved, be it financing or equipment shortages. It might be more expensive but the opportunities are there.”Marani says the local oil and gas sector has the opportunity to grow. It will, however, require players that are willing to take risks and are willing to invest in the long term as these types of projects take time to develop.According to Marani, Virginia is on track to produce its first liquid helium shortly, while the LNG has come online at an ideal time to become a solution not only for energy security in the country, but also for cleaner energy.
