Secrecy around Linde and Afrox’s relationship with Renergen

Linde Group and its African subsidiary Afrox refused to comment on its relationship with Renergen, with whom it partnered in 2016 to commercialise the Free State helium and natural gas field.

In May 2016, the Linde Group and its African subsidiary Afrox announced a “historic agreement” with Renergen to commercialise the Free State helium and natural gas field.

Linde said the 187,000-hectare field in Virginia had proven reserves of 25 billion cubic feet of natural gas and helium.

Helium is relatively scarce on Earth and tends to be trapped with natural gas in relatively low concentrations—typically up to 1%.

However, Linde said the Free State helium and natural gas field enjoys concentrations of up to 3% to 4% by volume.

It added that this was the first and only onshore petroleum and natural gas right in South Africa capable of supplying helium to numerous specialised and industrial markets.

Renergen, through Tetra4, contracted the helium under an offtake agreement with Linde, via its global helium business.

Linde added that Afrox, a member of the group, will operate the Tetra 4 plant and market the helium.

Linde Engineering said it would design and deliver the plant which would commence operations in 2018/19.

Linde said it will use its high-tech extraction technology to separate helium from natural gas through a single system using a patented processing plant.

The plant purifies, compresses, liquefies, and stores the helium, ready for distribution to customers.

“The plant is modular and will be precision manufactured in Europe before being shipped to the Free State for fast and efficient construction,” Linde said.

Afrox managing director Schalk Venter said the discovery and commercialisation of the Free State onshore helium source is great news for the industry.

Venter said signing the agreement with Renergen marked a historic moment in bolstering South Africa’s self-sufficiency in helium production.

Linde Group’s head of global source development, global helium, and rare gases, Nick Haines, was equally excited.

“Linde has worked diligently to commercialise this unique helium resource together with Tetra4 and looks forward to receiving helium upon commencement of plant operations,” he said.

No commercial helium production eight years later

Eight years after the Linde and Afrox agreement, Renergen has failed to produce and sell helium commercially.

Renergen’s first commitment to commercially produce LHe came in May 2016, when it announced signing the deal with Afrox.

This deal would have enabled Afrox to source and supply LHe in South Africa by 2018/19, two to three years after the agreement was signed.

After the 2019 deadline was missed, Renergen provided new guidance. It said it would produce 350 kg of LHe daily by 2021. Again, this did not materialise.

In an October 2023 update, Renergen promised to start producing helium by the end of 2023. Once again, this did not materialise.

Renergen blamed cooling equipment problems. It first reported these problems in June 2023 and said the repairs were completed in September 2023.

On 29 December 2023, Renergen said the helium cold box was successfully recommissioned and tested.

“We are now looking to progress with final system integration so that commercial liquid helium production can commence,” it said.

“Our customer will be moving their helium iso-container back to the site so we can fill it directly to improve filling time.”

However, Renergen’s latest quarterly update, released in April 2024, revealed that it had yet to complete its integration of the helium system.

Renergen has, to date, failed to show that it could produce commercial helium. Instead, it has missed numerous deadlines with more promises every time.

Daily Investor has previously asked Renergen for comment about its missed helium deadlines, but the company preferred not to comment.

There is also uncertainty surrounding Linde and Afrox’s relationship with Renergen and its involvement with the helium plant.

Daily Investor asked Linde and Afrox about the current status of their relationship with Renergen, but they preferred not to answer this question.

The company would also not comment on whether it independently tested Renergen’s Virginia Gas Project’s gas and whether it contained 2% helium.

The only communication from Afrox and Linde over the past two years was asking for an image of a Linde Tanker at Renergen’s Virginia plant to be removed.

Linde did not elaborate on why it did not want its tanker associated with Renergen’s Virginia Gas Project.