THE Free State government is pinning its hopes for an economic boom on a multi-billion-rand natural gas project in the province that is expected to drive local industrialisation and create jobs and other knock-on opportunities.
Spanning 187 000 hectares of gas fields across the towns of Welkom, Virginia and Theunissen, the project is set to position South Africa as one of the world’s leading suppliers of liquified natural gas (LNG) and helium.
This has given the Free State – which has always emphasised business opportunities exist in the province on account of its central location and proximity to all major provinces in the country – a new selling point as it seeks to attract investors.
“The location is a strategic issue in the sense that in itself for whatever product it provides those advantages and that’s why we have been making emphasis around it,” Thabo Meeko, the MEC for Small Business Development, Tourism and Environmental Affairs, told The Free Stater in an interview on the sidelines of the Free State Investment Conference held in Bloemfontein this week.
“But surely there are things which underpin that understanding,” he added.
“One of it is that we have just discovered that the Free State has got large areas of gas and, standing here today, we can indicate that infrastructure has been built up to a billion-rand investment.
“The project is going into the second phase at around R50 billion for that gas exploration.
“Our leverage as government is certainly job creation and also the benefit of the local economy.”
Renergen the company that holds the production and exploration rights for the gas fields, successfully produced liquid helium from the plant for the first time in January 2023.
The first phase of the Virginia Gas Project was expected to produce around 350 kilogrammes of helium per day – enough to satisfy all of South Africa’s requirements and still have excess.
Its second phase, which is which is anticipated to come online in 2027, is expected to ramp up production to 4.2 tonnes per day – producing somewhere between six and eight percent of the world’s global helium supply.
As part of its efforts to exploit the potential for significant economic benefits and job growth from the project, the Free State provincial government is looking to secure Special Economic Zone (SEZ) status for the gas fields.
SEZs within South Africa are geographically designated areas set aside for specifically targeted economic activities to promote economic growth and exports by using support measures to attract foreign and domestic investments and technology.
“We have already applied together with the municipality for a special economic zone for the sole purpose of building the capacity around an industrial park and that’s where the leverage is going to be upscaled in the sense that we will now be dealing with the processing of that gas,” Meeko said .
“We have been schooled that out of helium you can derive quite a whole lot of beneficiation – gas to energy is one of them and, secondly, (the manufacture of) micro-chips and micro-conductors.
“That is why as part of the building up to this investment conference we undertook international trips to China and Singapore in particular.
“Subsequent to that, we engaged many ambassadors including Qatar as you know their economy is based on gas so that we build capacity as a response of government working together with investors on how we leverage the local economy and job creation.” – Staff Reporter