SIMON BROWN: I’m chatting now with Stefano Marani. He’s of course, Renergen CEO. A Sens report came out yesterday (reporting that) phase two of the Virginia Gas Project Studies is underway. Stefano, good morning. I appreciate the early morning time. I’m assuming phase two is probably in the same sort of broad geographic area of phase one. A novice like me then, says, if you were finding helium and liquid natural gas in the original production, your likelihood in phase two is probably fairly good. I am not the geologist here, but the geology is kind of going to be in the same region. Is that a fair comment?
STEFANO MARANI: Look, you are spot on. Good morning to your listeners. The distinction between phase one and phase two is just the size of the plant. When we were planning phase one, at that point in time we didn’t have as much geological data, and so we needed to size the plants according to what we believed were best estimates at that time in terms of what we could get out of the ground sustainably, as well as satisfying lenders.
Obviously, as time went on and we did more drilling, we’d already placed the orders for phase one, and it emerged that obviously there’s a lot more geologically underground than we had originally anticipated.
And so phase two is really about building a second plant next to the first, which will operate in conjunction with the first, and it’s to really scale up production.
SIMON BROWN: In a sense, this is almost like you’re never sure when you start a greenfields project in terms of what’s there; and the flip side is the demand. I know, for example, your helium has come out a lot richer than anticipated. It’s a de-risking process – maybe start a little smaller, scale-up. In an ideal world, how much bigger would that phase two be relative to the first plant that you’ve got coming on stream later this year?
STEFANO MARANI: … We are planning two phases to phase two. So phase 2a and 2b. Our hope is that phase 2a comes online in the calendar year 2023. That would add, call it, five tonnes per day, a yield relative to phase 1 with plant 350 kilos, And then phase 2b in 2025, 2026. And that would add an additional five tonnes of helium per day.
LNG-wise [liquefied natural gas wise], it would go from 2 500 gigajoules in phase one to an additional 12 500 in phase two, and an additional 12 500 in phase 2b.
SIMON BROWN: So the short answer is in an ideal world – and we’ll caveat with that. Those are absolutely massive numbers. And your phase one is sort of on plan to come on stream later this year, and then ‘23 and ‘25 – those are quite quick down the line.
STEFANO MARANI: It’s really not that far away when you think about it. And a lot of the work that we’ve done in phase one has been critical in laying the foundations for phase two; a lot of the planning that we did in phase one we leant over into phase two. The one thing that a really very, very small group of people in the world who have actually built a helium plant will tell you is that it’s not a quick process. Here you are talking about building something that’s going to manufacture, in scale, something that’s going to produce a liquid at three above absolute zero. It’s an engineering feat of note.
So the one thing that we have benefited from in building phase one and a little pilot test phase, is really that we’ve got to grips with what the engineering challenges are. And we’ve been planning phase two for the better part of two to three years.
SIMON BROWN: Okay. So it is sort of getting smarter, and the helium numbers are massive. Listeners, go Google the helium story. And in fact, we’ll get Stefano one day and talk around the helium story, how it was a strategic reserve in the US and then it wasn’t. And the fact is that there’s very little helium actually being mined out there anywhere on planet earth. It really is worth the time.
Stefano Marani, Renergen CEO, I really appreciate your early morning time. I want to get you on one day. Let’s get that helium story. It is a fascinating story.