Renergen’s share price leapt more than 5% yesterday morning after it informed shareholders that liquefied natural gas (LNG) deliveries had recommenced following a planned, but longer than expected, maintenance outage.
The delays during the planned maintenance outage were primarily as a result of the scheduled maintenance being brought forward to coincide with the helium coldbox repair, CEO Stefano Marani said in an update yesterday to the JSE’s news service.
“The shutdown ran longer than expected owing to unexpected challenges with the primary mixed refrigerant compressors. These compressors were supplied by a company that is part of a global Swiss compressor manufacturing group, which includes China where the compressors were assembled,” he said.
The original equipment manufacturer (OEM), local agent and Swiss head office, with Renergen’s teams, were able to diagnose the problem and determine the root cause.
“As a result of the losses suffered due to the delay, the company will seek to obtain relief from insurance cover and or a contractual claim against its suppliers,” Marani said.
The share price was trading at R10.95 late yesterday afternoon, after falling steadily from R22.12 over 12 months as commissioning of South Africa’s only onshore LNG and helium production facility has taken longer than originally stated by the company.
Yesterday’s update was not met favourably by all commentators. For instance, shareholder activist Albie Cilliers wrote on the X platform that “Renergen now blames the Swiss for faulty plants. Helium (is) not ‘imminent’ any more, more delays…”
He said: “Renergen is a circus without a clown because instead of being on his soapbox before his investor audience, the clown has run away to hide in the USA.”
Kavi (@PillayKavi) also said on X: “On the one hand this bodes badly for exploration of any kind. On the other hand maybe the geniuses who put money in here should be in the home loan or asset finance business.”
Marani said: “We have turned our full attention to the helium system following the successful repair and testing of the helium coldbox last year. We are waiting for the arrival of the OEM, which will occur following the Chinese New Year celebrations,” he said.
He said that once the Chinese OEM representatives were in the country, they would finalise “the integration of the helium system into the overall plant” and then undertake a final test to ensure the plant performed according to design specifications.
In preparation, the nitrogen and helium systems would be filled with externally sourced refrigerant, primarily pure gaseous nitrogen and helium, which were essential to the cooling process of the respective coldboxes, he said.
BUSINESS REPORT