When South African startup Renergen acquired production and exploration rights for grassy fields near Virginia in 2013, they anticipated discovering small natural gas reserves for local mining.
Purchased for a mere $1, the founders soon realized they had stumbled upon something far more valuable than expected – abnormally high concentrations of helium.
Helium, often associated with party balloons, has crucial industrial applications when condensed into a liquid form.
Renergen’s Virginia Gas Project, with proven helium reserves of over 7 billion cubic feet, is now estimated to be worth between $4 billion and potentially up to $12 billion, including potential future reserves.
Nick Mitchell, Renergen’s COO, recounts the initial modest aspirations of setting up a small-scale gas power station.
The unexpectedly vast helium deposit, with concentrations averaging 3% and reaching as high as 12%, has positioned Renergen as a potential game-changer in the helium market.
Renergen successfully produced liquid helium in January 2023 and aims to commence commercial operations within the next month, extracting and distributing helium alongside natural gas.
Notably, Renergen’s helium production boasts a smaller environmental footprint due to its higher concentration, making it potentially more eco-friendly.
Chris Ballentine from Oxford University highlights the significance of Renergen’s primary helium gas system, emphasizing the potential to reduce the industry’s carbon footprint.
The higher helium concentration also contributes to lower production costs, making Renergen a competitive player in the global helium market.
Being a new player in Africa, Renergen’s gas project has been designated a “strategic integrated project” by the South African government, expediting regulatory processes
This comes at a critical time when the global helium supply faces disruptions, and Renergen could alleviate the supply crisis.
Despite ambitious projections, Renergen faced a significant drop in share prices in late 2023, possibly linked to criticism of transparency on social media.
CEO Stefano Marani remains confident, citing upcoming developments that will “significantly de-risk the project moving forward.”
In a strategic move, Renergen sold 5.5% of Tetra4, its subsidiary overseeing the Virginia Gas Project, for $29 million.
Additional equity is planned to be raised through an IPO on the Nasdaq stock market. Marani believes that building confidence will take time but sees the helium turn-on as the first step in that process.