Renergen’s helium promises full of hot air

Renergen’s latest comments about helium production followed a string of similar statements over the last two years.

On Monday, 6 May 2024, Renergen said it had successfully produced helium at its Virginia Gas Project.

“Since 2 April 2024, the Original Equipment Manufacturer (OEM) has brought the helium cold box to the appropriate temperature to liquify helium in batches from its wells,” it said.

“The OEM is now ensuring that the operating conditions are satisfactory to commence the performance test, at which stage the helium train will be put into continuous operation mode.”

Renergen CEO Stefano Marani said OEM will complete the necessary checks and balances in the coming weeks before embarking on the performance test.

He added that all liquid helium produced is recoverable and will be used to fill tanks for customers.

On Tuesday, 11 June 2024, Renergen said it had completed the needed actions, restarted the facility, and resumed liquid helium production as of 4 June 2024.

The liquid helium produced is used to cool the remaining components of the helium train, such as tanks and pipes, to approximately -269 degrees Celsius.

“The OEM contractor must now demonstrate that they are operating the entire plant at the desired temperature, pressure, and production flow parameters,” it said.

This is needed before the contractor is allowed to commence the final contractual obligation of completing a performance test.

Renergen has also appointed two independent helium consultants to bolster the company’s team’s skillset for operation once the performance test is complete.

“They have indicated that no fundamental issues are likely to exist with the plant, as we have successfully liquified helium from raw gas with proven repeatability,” it said.

“They emphasised the importance of patience in this final stage of the commissioning process, as it is a crucial step in ensuring the optimal performance of the plant.”

“We acknowledge it has taken longer than originally planned to reach this step, but ensuring the safe operation of the plant is our main priority right now,” Marani said.

“The progress achieved to date puts us amongst only a few companies globally to achieve this status.”

He added that investors should not lose sight of the fact that Renergen will shortly own and operate one of the less than 20 liquid helium production facilities globally.

The latest development sounded promising. However, it is nothing that investors have not heard before.

The promises started in May 2016, when Renergen announced that it signed a major deal with Afrox which will enable it to locally source and supply LHe by 2018/19.

This deadline came and went. In August 2019, Renergen made a new promise: It would be producing 350 kg of LHe per day by 2021. Again, this did not happen.

On 5 January 2023, Renergen said it produced its first LHe at the Virginia Gas Project and that all components of Phase 1 were operational.

Two months later, Renergen released a guidance note reaffirming that they are continuing helium production.

On 2 May 2023, it said production is being optimised and integrated. It was slowly ramping up to its target of 300kg of helium per day within the 2023 financial year.

This was fantastic news to shareholders who were looking forward to Renergen starting to sell helium and produce revenue as promised.

However, this enthusiasm was short-lived. On 26 June 2023, Renergen said a leak was discovered in the liquid helium cold box. The OEM would fix the leak off-site, it said.

Renergen added that it expected the helium system to be ready for performance tests by October 2023.

Since then, there has been one announcement after the other about progress with the cold box and the helium production system.

However, to date, the company has not sold any helium, and it is not clear when this may change.

Therefore, the latest announcements regarding helium production should be considered in the context of previous events.

To date, Renergen has failed to show that it can profitably produce and sell liquid helium (LHe) at its Virginia Gas Project.

The most important measure of Renergen’s progress is its ability to profitably produce and sell liquid helium.

Until its financial statements show that this has happened, investors will remain sceptical about Renergen’s prospects.

Renergen’s helium promises

Date	Renergen Statement
5 January 2023	Renergen reached a major milestone and produced its first liquid helium.
8 March 2023	Renergen releases a guidance note reaffirming that they are continuing helium production.
2 May 2023	Helium production is being optimised and integrated slowly being ramped up to its target of 300kg of helium per day within the FY2023
26 June 2023	A leak was discovered in the liquid helium cold box. The OEM (original equipment manufacturer) would fix the leak off-site. Renergen said it expects the helium system to be ready for performance tests by October 2023.
29 September 2023	The helium cold box has been repaired and the cold box has been delivered back on site. The cold box is in the process of being re-installed and recommissioned. Renergen is now focused on turning on the helium module and producing liquid helium.
31 October 2023	Commissioning of the cold box is on track to produce liquid helium by the end of the 2023 calendar year.
29 December 2023	The helium cold box has been successfully recommissioned and tested, helium has successfully produced and Renergen is confident in the repair and looking forward to commence commercial helium production.
15 February 2024	Renergen turned its full attention to the helium system and are waiting for the OEM to arrive to finalise the integration of the helium system to the plant and undergo performance tests. They will arrive after the Chinese New Year.
28 March 2024	OEM arrived late February and helium system integration is nearly complete with no major issues picked up and the final commissioning is progressing well. Helium and nitrogen cold boxes are fully integrated. The OEM and Tetra 4 are conducting the final checks before commercial helium production.
6 May 2024	Renergen reached a major milestone and is producing liquid helium. The OEM are now ensuring that the operating conditions are satisfactory to commence the performance test after which the helium train will be put into continuous operation mode. All helium from these tests will be stored for customers.
11 June 2024	Liquid helium production has been resumed as the relevant tests have been conducted. The OEM must now prove that they can run the plant at the desired specifications before they can complete the performance test which is forecasted to take 7 days. All produced helium will be stored for customer use.