TechInAfrica – The US government will invest ZAR 600 million to a South African gas project, through its development finance institution Overseas Private Investment Corporation (OPIC) and the project will be constructed in Virginia.
JSE-listed gas producer Renergen announced that the US government is lending them a loan for a gas plant in the Free State and that the loan would establish the first phase of the Virginia gas project after providing the required capital, according to the emerging liquefied natural and helium producer.
Following the deal, Renergen will now focus on constructing the facilities and finalizing the drilling for the project. One of the gas producer’s targets is to extract and purify Liquefied Natural Gas (LNG), and helium, as a high concentration of the gas was discovered in its test wells.
The current global consumption of helium is about 77 T a day and the company believes it could help meet the demand following the new investment. Currently, the US, Qatar, and only a few other countries are producing the entire global supply of helium.
Party City, a global providing party materials store was forced to close 45 of its outlets due to helium’s global supply that is lacking outreach against the global demand, as the global supply is nesting low, with the surging commodity cumulating at 500% in the last 15 years. Helium has always been a critical function to MRI scanners as it is used to cool the instrument.
The vice-president for structured finance, Tracey Webb, expressed their enthusiasm for the partnership with Renergen by providing financing to support private sector-led economic development in South Africa, expanding trade and commercial ties between U.S. and Africa, and ultimately increase the global supply of helium.
Renergen’s CEO, Stefano Marani also elaborated, “It is also a huge endorsement by the US government through the OPIC of both the project and the significant importance of securing helium supply.”.
The company had completed the final binding agreement and revealed that OPEC will dispense the loan in a few days.