Botswana CBM Project Advances
Production testing has begun on a coalbed methane (CBM) deposit in southeast Botswana that may be developed with a 10 megawatt power plant to serve the energy-hungry region, developer Tlou Energy said on March 11.
Australia- and London AIM-listed Tlou announced two weeks earlier that long-term gas testing started at two new wells drilled on its 100% owned Lesedi CBM Project, which it hopes will be the first commercial gas production in Botswana. Tlou flared its first gas at Lesedi in 2014 and holds 10 prospecting licences covering 8,300 km2; it points to 3.3 tn ft3 of contingent resources there.
In interim results on March 11, Tlou said it aims to book independently certified reserves at Lesedi later this year and would be the first in Botswana to do so. It says expanding existing operations in the field will be a requirement ahead of delivering a 10 MW pilot plant – which would be Botswana’s first gas-fired power plant – and that talks continue with potential off-takers.
Over the next 12-24 months Tlou said it will take steps towards the 10 MW pilot plant’s successful commissioning, noting that its application for an Environmental Impact Statement has already been lodged and is expected to be approved in H1 2016.
Botswana currently relies on diesel generators or expensive imported power. In late 2015, the government announced an "emergency tender" for at least 10MW of generation capacity, which Tlou says would provide it with “a highly compelling offtake agreement”. The company aims to provide gas-to-power solutions for southern Africa. It reported a loss of Aus$1.99mn ($1.5mn) in July-December 2015, compared to a 2H2014 loss of Aus$1.14mn.
Mark Smedley