The Virginia Gas Project involves the exploration and production of gas fields. Credit: Saipem.

South African energy firm Renergen has awarded contracts to three firms to undertake engineering studies of Phase II of the Virginia Gas Project in the Free State.

The Virginia Gas Project involves the exploration and production of 1,87,000ha of gas fields across Welkom, Virginia, and Theunissen.

Said to hold one of the richest helium concentrations in the world, the fields will have the capacity to produce liquid helium, which is planned to be exported, as well as LNG for usage within the country.

Renergen awarded a front-end engineering design (FEED) contract to Saipem for the development of the liquid natural gas and liquid helium processing facilities including the associated balance of the plant.

Saipem XSIGHT upstream and LNG product manager Eric Zielinski said: “The FEED contract specifications for Virginia Gas Project fully fits within our strategy of diversification providing innovative ideas for the new energy movement, enabling carbon footprint reductions, and helping to produce a rare and valuable commodity such as helium.”

The second FEED contract has been awarded to EPCM Holdings for the development of Renergen’s Phase II gas gathering pipeline.

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Consulting and advisory firm Sproule has been awarded a contract by Renergen to assess and certify the reserves. The work will be based on additional data acquisition results and the current drilling campaign.

Renergen expects the three contracts will eventually help in concluding the feasibility studies for the Virginia Gas Project Phase II.

The firm plans to make a financial investment decision on the project following completion of the feasibility studies on or around the second quarter of this year.

Renergen managing director and CEO Stefano Marani said: “This is a significant step forward in the planning of Phase II, as it not only defines the total capital expenditure required but will clearly help define the project’s financial parameters.

“Working with organisations like Saipem, EPCM and Sproule brings a wealth of knowledge, experience and technical capability to the overall project, which we believe will be of great benefit to our stakeholders and the long-term value of the Virginia Gas Project.”

EPCM Holdings is currently working on Renergen’s Phase I gas gathering pipeline.

Phase I of the gas project is planned to be commissioned later this year and is expected to have initial volumes of nearly 350kg of helium and 2,500GJ of LNG per day.

Phase II of the Virginia Gas Project will have capacity to produce considerably larger quantities of LNG and liquid helium.

Last year, South Africa-based energy firm Sasol announced plans conclude its West African oil operations as part of its business structure revamp.