South Africa has become one of the few countries in the world to produce its liquid helium, thanks to a strategic partnership between Mahlako Gas Energy (MGE) and Renergen. MGE, a fund management company focused on energy infrastructure projects, has invested R550 million in Tetra4, a subsidiary of Renergen that holds the country’s first onshore petroleum production license.
Tetra4 operates the Virginia Gas Project in the Free State province, where it extracts natural gas from a giant underground fracture that contains exceptionally high concentrations of helium. Helium is a rare and valuable element that has many applications in industries such as space exploration, medical imaging, fiber optics, electronics, and welding.
The Virginia Gas Plant, which started commercial operation in January 2024, is capable of producing up to five tonnes of liquid helium per day, making South Africa the eighth largest helium exporter in the world. The plant also produces compressed natural gas (CNG) and liquefied natural gas (LNG) for domestic and regional markets.
MGE’s co-principals, Meta Mhlarhi and Makole Mupita, said their investment in Tetra4 aligns with their vision of promoting economic transformation and diversity within the energy sector, as well as contributing to South Africa’s energy security and sustainability.
“This investment speaks to the Integrated Resources Plan’s overarching goals of ensuring security of supply, enhancing energy affordability, and actively contributing to carbon emission reductions,” Mupita said.
“We are enthusiastic about the opportunities that lie ahead and the positive impact our partnership will have in the energy transition for our country,” Mhlarhi added.
Renergen’s CEO, Stefano Marani, welcomed MGE’s involvement and said it would help accelerate the development of the Virginia Gas Project, which has an estimated helium reserve of 9.74 billion cubic meters.
“We are delighted to have Mahlako as a partner in this project, which is not only a game-changer for South Africa, but also a significant contributor to the global helium supply,” Marani said.
He also praised the support of the Department of Mineral Resources and Energy, which granted Tetra4 the onshore petroleum production license in 2023, after a rigorous environmental impact assessment process.
The global helium market was worth $10.6 billion in 2019, according to Research and Markets, and is expected to grow at a compound annual growth rate of 4.8% from 2020 to 2025. However, helium supply has been frequently disrupted by geopolitical tensions, technical issues, and declining reserves in major producing countries such as the US, Qatar, and Algeria.
South Africa’s entry into the helium market could help alleviate the global shortage and create new opportunities for innovation and development in the country and the region.
Source: Engineering News
