- Free State gas company Renergen just signed a R600 million loan deal with a US government agency to fund part of its development in Virginia.
- Renergen wants to produce liquefied natural gas – and helium. Possibly quite a lot of helium.
- The United States, with its high-tech resurgent space industries, is particularly vulnerable to a shortage of helium, which is hard to produce and store.
An agency of the United States government has agreed to lend it more than R600 million to build a gas plant in the Free State, the JSE-listed Renergen announced on Wednesday, shortly after the signing of the deal. The agency, the Overseas Private Investment Corporation (OPIC), will lend Renergen $40 million over 12 years, at a rate linked to price of US bonds, making for what the local company calls an “efficient source of capital”. The loan also has a built-in grace period of around three years before the principle debt will become due, which Renergen says will give it time to build and commission it Virginia Gas project. Renergen plans to extract and refine liquefied natural gas (LNG), which has a wide range of applications but is commonly available – as well as much more scarce helium. The company has detected very high concentrations of helium in its test wells, high enough to make it a major global producer of helium.Helium is critical in fields such as high-tech manufacturing and for some types of rocket engines, and is also used in MRI machines and many devices where super-cooling is required. But its unique properties also make it nearly impossible to store for a long period; container can typically hold it for around 45 days. Only a handful of countries, including the USA, currently produce helium.