Botswana on Thursday announced the extraction of coal-bed methane that will deliver gas within six months from a pilot plant.
According to the chief executive of the Kalahari Gas Corporation (KGC), Julian Scales, the low estimated cost of extraction and liquefaction of the Botswana gas could result in a selling price of $3,40/gigajoule, less than half the current international $7,90/gigajoule.
”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.
Botswana could become the regional supplier of energy. All its neighbours are net importers of energy.
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. ”For Botswana it will be a magnet to attract investment in industry.”
He expects the success of the resource to be proven over the proposed two-year life of the pilot operation.
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.
”We have five cased, capped and cemented production holes ready for stimulation [the industry term for ready to deliver gas].”
The United States ambassador to Botswana, Joseph Huggins, who with Minister of Minerals and Energy Boometswe Mokgothu announced the project, said it has the potential to earn Botswana $275-million a year.
The project is being supported by the US-government-owned Overseas Private Investment Corporation, with equity of $2,5-million and an investment guarantee to KGC of $8,5-million, which will be used to fund the pilot operation.
The US Trade Development Agency funded a $575 000 feasibility study.
”We have found the gas — now we have the means to take it out,” an upbeat Mokgothu said.
He envisaged cheap energy and the subsequent development of small industries and a switch from petroleum to gas for vehicles.
Huggins said the project will attract investment to Botswana and fuel local growth.
”It will substantially increase the attractiveness of Botswana as an investment destination and spark local growth,” he said.
It will go a long way to meeting Botswana’s energy needs.
Currently only 22% of Botswana has access to electricity and the country imports 70% of its energy requirements.
KGC will initially exploit an area of 160 000ha, 170km north of Gaborone, close to the border with Zimbabwe.
It is part of an area held on a 25-year lease by holding company Botswana Gas Corporation, which is owned 40% by Scales and 60% by an unnamed private investor.
KGC is owned 50% by Scales and 25% by US-registered private company Covalent Energy Corporation. — Sapa