{"id":13590,"date":"2024-01-04T13:47:17","date_gmt":"2024-01-04T13:47:17","guid":{"rendered":"https:\/\/shareperformanceinsight.com\/index.php\/2024\/01\/04\/a-company-bought-gas-rights-to-this-land-for-1-helium-means-it-could-be-worth-billions\/"},"modified":"2024-01-04T13:47:17","modified_gmt":"2024-01-04T13:47:17","slug":"a-company-bought-gas-rights-to-this-land-for-1-helium-means-it-could-be-worth-billions","status":"publish","type":"post","link":"https:\/\/shareperformanceinsight.com\/index.php\/2024\/01\/04\/a-company-bought-gas-rights-to-this-land-for-1-helium-means-it-could-be-worth-billions\/","title":{"rendered":"A company bought gas rights to this land for $1. Helium means it could be worth billions"},"content":{"rendered":"<p class=\"paragraph inline-placeholder\">      When South African startup Renergen bought the production and exploration rights for some grassy fields near Virginia, a town in the country\u2019s Free State province, the founders were expecting to find small natural gas reserves that could power nearby mining opportunities.  <\/p>\n<p class=\"paragraph inline-placeholder\">      They paid $1 for the rights in 2013, according to CEO Stefano Marani, and started to test the composition of the gas flowing from two rusted drill pipes that had been installed years before for mineral exploration. What they found<strong> <\/strong>was abnormally high concentrations of helium.  <\/p>\n<p class=\"paragraph inline-placeholder\">      Beyond inflating party balloons, helium has a number of commercial applications. When condensed into a liquid form, it\u2019s an essential cooling component used in the manufacture of microchips and in the operation of<strong> <\/strong>life-saving MRI scanning technology. Yet global helium prices are volatile and supplies erratic, with the gas produced in fewer than 10 countries in the world.  <\/p>\n<p class=\"paragraph inline-placeholder\">      Renergen had unwittingly struck gold. Today, the company says it has proven helium reserves of more than 7 billion cubic feet at the Virginia Gas Project that could be worth more than $4 billion, and potentially<strong> <\/strong>up to $12 billion when including further<strong> <\/strong>possible reserves.  <\/p>\n<p class=\"paragraph inline-placeholder\">      \u201cWe had humble, modest aspirations of setting up a small scale [gas] power station that could deliver a couple of megawatts to some nearby mining opportunities,\u201d recalls\u00a0Nick Mitchell, Renergen\u2019s chief operating officer. \u201cWe had no idea of the extent and scale and the sheer world-class nature of this helium deposit.\u201d  <\/p>\n<p class=\"paragraph inline-placeholder\">      The company successfully produced liquid helium from the plant for the first time in January 2023. After delays throughout the year due to a leak in the vacuum seal of the helium cold box, it hopes to begin commercial operations within the next month, extracting helium alongside natural gas, then processing and distributing it to customers, such as Linde, a global engineering firm.<strong>\u00a0<\/strong>  <\/p>\n<div class=\"gallery-inline gallery--hidden\">\n<div class=\"gallery-inline__main\">\n<div class=\"gallery-inline__container\">\n<div class=\"gallery-inline__slides\">                                                                                                                                                        <\/div>\n<p>        <button class=\"gallery-inline__prev-overlay\"><\/button>        <button class=\"gallery-inline__next-overlay\"><\/button>      <\/p>\n<\/div>\n<h5 class=\"gallery-inline__headline\">From railways to ports, these infrastructure megaprojects are reshaping Africa<\/h5>\n<div class=\"gallery-inline__counter\"><\/div>\n<div class=\"gallery-inline__controls\">        <button class=\"gallery-inline__prev\">          Prev                  <\/button>        <button class=\"gallery-inline__next\">          Next                  <\/button>      <\/div>\n<\/div>\n<\/div>\n<h2 class=\"subheader\">    Smaller footprint<\/h2>\n<p class=\"paragraph inline-placeholder\">      What makes Renergen\u2019s natural gas reserves so special<strong> <\/strong>is the unusually high concentration of helium. Marani says that it averages 3%, and in some places reaches as high as 12%. In contrast, the US, the world\u2019s biggest supplier of helium, has an average concentration of<strong> <\/strong>0.35%, and Qatar, another major player, averages 0.04%, according to the US Bureau of Land Management.<strong><\/strong>  <\/p>\n<p class=\"paragraph inline-placeholder\">      This could make Renergen\u2019s helium more eco-friendly, according to Chris Ballentine, chair of geochemistry at Oxford University in the UK. Generally, helium is produced as a byproduct of liquefied natural gas (LNG) \u2013 a mix of gases that is primarily methane \u2013 he explains, and it\u2019s only at a certain concentration (usually around 0.3%) that it becomes economically worthwhile to extract helium by itself.  <\/p>\n<p class=\"paragraph inline-placeholder\">      This means that most of the time, helium supply is dominated by hydrocarbon producers that are extracting and selling helium on the side, and production is therefore linked to a high carbon footprint, he continues. But a higher helium concentration means less associated methane is produced, thereby reducing its carbon footprint.  <\/p>\n<p class=\"paragraph inline-placeholder\">      \u201cWhat makes the Renergen prospects so interesting is that (while) there are hydrocarbons associated with their helium production, it\u2019s a much smaller footprint. They\u2019ve effectively found a primary helium gas system,\u201d he says.  <\/p>\n<p class=\"paragraph inline-placeholder\">      Ultimately, Ballentine hopes the industry will move away from producing helium from LNG, and use sources such as gas fields where helium occurs alongside nitrogen, as explored in a recent study that he co-authored.  <\/p>\n<p class=\"paragraph inline-placeholder\">      Another benefit of the high concentration is cheaper<strong> <\/strong>production. \u201cWe\u2019re a much lower-cost producer of helium than most other players out there,\u201d says Marani. \u201cWe drill very shallow wells, probably in the region of about 1,000 to 1,500 feet \u2013 low cost, small footprint \u2013 and then the gas comes out naturally of its own volition,\u201d he says.  <\/p>\n<h2 class=\"subheader\">    Africa\u2019s supply point<\/h2>\n<p class=\"paragraph inline-placeholder\">      With the global helium supply frequently disrupted, a new player in a different geographical region is very welcome, says Ballentine. \u201cWe are currently in a supply crisis, because we only have a few limited supply points \u2026 places like Renergen will certainly alleviate that,\u201d he says.  <\/p>\n<p class=\"paragraph inline-placeholder\">      Currently, none of the world\u2019s helium is<strong> <\/strong>produced in Africa \u2013 helium-rich gas fields have been located in Tanzania, but are not yet in commercial production.  <\/p>\n<p class=\"paragraph inline-placeholder\">      Marani notes that Renergen\u2019s gas project was designated a \u201cstrategic integrated project\u201d by the South African government, helping to speed up regulatory approval processes.  <\/p>\n<p class=\"paragraph inline-placeholder\">      According to Mitchell, the company\u2019s \u201cphase one project,\u201d a small pilot funded by the US government, will produce around 350 kilograms of helium per day \u2013 enough to satisfy all of South Africa\u2019s requirements and still have excess. Its \u201cphase two project,\u201d which is anticipated to come online in 2027 and has received financing from the US government and South Africa\u2019s Standard Bank, is expected to ramp up production to 4.2 tons per day \u2013 producing somewhere between 6% and 8% of the world\u2019s global helium supply. With the global helium market predicted to be worth more than $6 billion in 2027, according to the firm Research and Markets, that would generate significant returns.  <\/p>\n<p class=\"paragraph inline-placeholder\">      In December, the company announced it had sold 5.5% of the equity in Tetra4, Renergen\u2019s subsidiary that owns and operates the Virginia Gas Project,<strong> <\/strong>for 550 million rand ($29 million) to Mahlako Energy Fund and Third Way Investment, two investment management firms based in Johannesburg. It plans to raise more equity via an initial public offering (IPO) on the Nasdaq stock market in the US.<strong> <\/strong>The company is already listed in South Africa and Australia.  <\/p>\n<p class=\"paragraph inline-placeholder\">      \u201cBuilding up confidence is going to take a very long time, I\u2019ve got no illusions about that,\u201d says Marani. \u201cI believe that the helium turn-on is the first step in that process.\u201d  <\/p>\n<p class=\"editor-note inline-placeholder\">  Eleni Giokos, Michael Cross and Tom Bouchier Hayes contributed to this report.<\/p>\n\n<div>This post appeared first on cnn.com<\/div>","protected":false},"excerpt":{"rendered":"<p>When South African startup Renergen bought the production and exploration rights for some grassy fields near Virginia, a town in the country\u2019s Free State province, the founders were expecting to find small natural gas reserves that could power nearby mining opportunities. They paid $1 for the rights in 2013, according to CEO Stefano Marani, and <\/p>\n","protected":false},"author":0,"featured_media":13591,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[],"class_list":{"0":"post-13590","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world"},"_links":{"self":[{"href":"https:\/\/shareperformanceinsight.com\/index.php\/wp-json\/wp\/v2\/posts\/13590","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/shareperformanceinsight.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/shareperformanceinsight.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/shareperformanceinsight.com\/index.php\/wp-json\/wp\/v2\/comments?post=13590"}],"version-history":[{"count":0,"href":"https:\/\/shareperformanceinsight.com\/index.php\/wp-json\/wp\/v2\/posts\/13590\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/shareperformanceinsight.com\/index.php\/wp-json\/wp\/v2\/media\/13591"}],"wp:attachment":[{"href":"https:\/\/shareperformanceinsight.com\/index.php\/wp-json\/wp\/v2\/media?parent=13590"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/shareperformanceinsight.com\/index.php\/wp-json\/wp\/v2\/categories?post=13590"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/shareperformanceinsight.com\/index.php\/wp-json\/wp\/v2\/tags?post=13590"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}