AHEAD of commissioning of the first phase of its Virginia Gas Project, Renergen Limited’s subsidiary, Tetra4, the holder of South Africa’s first and only onshore natural gas and helium production right, has taken delivery of four DAF CF 430 trucks from Babcock, to be used to haul ISO refrigerated containers of LNG in a ‘road pipeline’ to Renergen customers.
Having commenced construction in 2019, the Free State-based project – sitting on a massive production right that spans 187 000 hectares across the towns of Virginia, Welkom and Theunissen – is expected to produce its first liquefied natural gas (LNG) and helium in May this year. The roughly R1-billion project will produce 50 tons of LNG and 350 kg of helium per day at name plate capacity.
“We are excited about the imminent commissioning of phase 1 of our Virginia Gas Project – South Africa’s first commercial LNG facility,” explains Nick Mitchell, chief operations officer at Renergen. “With this project, South Africa becomes one of the only seven remaining producers of helium in the world, alongside the United States, Canada, Qatar, Russia, Poland and Algeria.”
The first phase of the project goes live with two main customers – Consol Glass and Ceramic Industries. The two companies will consume about 60% of the LNG from phase 1, with the remaining 40% destined for the trucking market as part of Renergen’s strategy to drive the dual fuel concept in the local logistics industry due to start later this year.
In fact, Renergen’s own four DAF trucks will be retrofitted with a dual fuel kit, which has been proven to achieve a substitution rate of between 35% and 50% on average, depending on the route and weight of the cargo.
“Key to our buying decision was DAF South Africa’s willingness to collaborate with us on the LNG dual fuel project, which we believe is the local transport industry’s immediate bridge to the net carbon reduction and into a renewable future” says Mitchell.
Due to the documented financial and environmental benefits, Mitchell believes dual fuel sets the logistics industry on the path to a sustainable future. He, however, says that there is no silver bullet on the road to sustainability, stressing that all alternatives, including natural gas, electric vehicles and hydrogen, among others, will all have a role to play and must co-exist.
“As the industry turns to alternative fuels to remain competitive and meet its environmental obligations, we see dual fuel as the immediate solution. DAF South Africa shares the same vision, and this has been demonstrated by its willingness to walk with us on this journey towards decarbonisation of the trucking industry,” he said.
Mark Gavin, sales director for Babcock’s Transport Solutions business, says given that up to 50% of a long haulage transporter’s running costs are attributable to diesel, dual fuel offers a feasible alternative, especially considering the abundance of natural gas in the local market.
“We have 24 dual fuel trucks in the market. With this solution, one of our clients in Pretoria is saving between R1 and R1,20 per kilometre, which translates to between R10 000 and R14 000 per truck per month. Every time the diesel price goes up, they save more,” explains Alec Jackson, senior sales executive at Babcock Transport Solutions.
Looking ahead, Mitchell believes that LNG prospects in South Africa represent an exciting future for the local logistics sector. At the recent 4th annual South African Investment Conference, Renergen committed a further R15-billion for the development of its phase 2 of the Virginia Gas Project. The second phase will produce between 500 t and 600 t of LNG per day, almost 10 to 12 times the size of phase 1. This will be complemented by about 5 t of helium per day..
“We are sitting on one of the most exciting and strategic natural gas discoveries in the country. We have spent the past nine years proving the resource and building a business model to support it. We are glad to announce that we have a proven resource totalling as much as 400-billion cubic feet of LNG (over 11-trillion diesel litre equivalent),” says Mitchell.
