Botswana strikes gas

It is sitting on massive, potentially lucrative gas resources on the eastern side of the Kalahari Karoo basin.

Both a Namibian private radio station and the SABC in South Africa last week broadcast an announcement by the licence holder, Kalahari Energy, that indicated the imminent start of mining operations.

Botswana Minerals and Energy Minister Charles Tibone acknowledged existence and bright prospects of the reserves already at a ministerial panel discussions at last year’s Mining Indaba in Cape Town, South Africa.

The former permanent secretary in Botswana’s Minerals and Energy Ministry, who became an entrepreneur before his election to the Botswana Parliament in 2004, said indications were that the country had 60-trillion cubic feet of coal-bed methane gas.

Kalahari Energy (KE), which, in conjunction with Botswana’s Department of Minerals and Energy, and Kalahari Gas Corporation (KGC) controls a 3 200 000 acre gas field in the Kalahari Karoo basin, has started drilling for commercial gas reserves.

Julian Scales, MD of KE stated that gas production wells would be drilled and completed in line with the gas demand. “The beauty of coal-bed methane wells lies in that they present a low risk, incremental investment and gas wells can be completed to suit demand.”

According to Scales, the low estimated cost of extraction and liquefaction of the Botswana gas could result in a selling price of less than half the current international price.

“There is an impending critical power shortage within the region. More easily and quickly installed gas-fired power generation could bridge the expansion of the coal-fired plants. Thereafter gas could be used for peak power generation at a premium rate for export,” said Scales.

Liquefied, the gas could be transported safely by road and rail.

“We will make the cost of energy so low that Botswana will become the regional supplier,” Scales said.

Comparing it with other resources, he said the South Africa-Mozambique gas project Mossgas has a currently estimated resource of one billion cubic feet and the United Kingdom North Sea resource has been initially estimated at three trillion cubic feet, while the Kudu gas field, located 170km offshore and northeast of Oranjemund in Namibia, has 1.3 trillion cubic feet of proven gas reserves in place, confirmed through an independent technical evaluation.

With the increase in power demand in South Africa, Eskom is expected to stop providing cheap surplus electricity, industrial heat production, cooking purposes and gas to liquid production. Motor performance is enhanced as natural gas burns cleaner than other fuels, providing longer engine life and lower maintenance costs.

Unlike coal, CBM does not contain environmentally harmful pollutants, and its production byproduct, water, can be used for irrigation or industrial-process water.

The Overseas Private Investment Corporation (OPIC) has provided an $8.5 million investment guarantee to KGC to finance the purchase of equipment and the drilling of coalbed methane.

Minister Tibone went on to add that Botswana was also endowed with vast coal resources totalling 212-billion tons, which had not been fully explored.

Interest in the coal deposits were concentrated on the Morupule and Mmamabula coal fields.

Reserve so far proven were 7,2-billion tons of coal, made up of 2,9-billion tons at Morupule and 4,3-million at Mmamabula.

There were also thermal coals for direct feeding into power stations or that could be washed and exported into international steam coal markets.

Projections for 2007 to 2010 were tilting in favour of coal exploitation to correct the regional imbalance in the supply and demand for electricity in the SADC region, which was presenting opportunities for the development of mines to feed the coal-fired power stations with coal from the Mmamabula coalfield.

The impending electricity deficit had also motivated the country’s local electricity supplier, Botswana Power Corporation, to expand its power station by 400 MW from its present 132 MW, which would require doubling of capacity from the current million tons of coal a year to more than two million tons a year.

All of Botswana’s major coalfields were in close proximity to the rail and power line infrastructure.

Morupule was already linked to the main railway line, which cut through the western extent of the Mmamabula deposit.

Mmamabula was well situated for both an export power station and an export coal mine, firstly because electricity from a future power station could be fed into the South Africa grid 60 km away at Lephalale (Ellisras) and secondly, Mmamabula straddled the border between Botswana and the part of South Africa known as the coal-rich Waterberg.

September 2006
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