Sasol and Origin Energy join hands in Botswana coal gas venture
A new joint venture between Sasol Petroleum International and one of Australia's largest energy firms, Origin Energy Limited, could potentially be the start of a new coal bed methane (CBM) exploitation project in Botswana.
"Through our joint venture, which is named Kubu Energy Resources, we have acquired three prospecting licenses from local CBM exploration company Sekaname," explained Ebbie Haan, Sasol's managing director after signing the Memorandum of Understanding with Origin's Director Paul Zealand.
The objective is to drill approximately five test wells to see the extent and nature of Botswana's CBM reserves. This preliminary exploration phase is expected to take about two years.
"The costs of one exploration typically starts at US$1 million but I am not sure how big the exploration budget is," Haan confessed.
CBM is a type of natural gas that is trapped in and in between coal layers deep below the earth's surface, and can be captured by drilling wells into those formations.
"Coal contains water. The idea is to pump that water from the coal layers, thereby reducing the pressure after which the gas naturally flows into the well," Haan explained.
The drilling process is similar to the one that is used to degas coalmines to prevent gas from entering the mineshafts.
"When degassing for safety purposes, CBM is released in the atmosphere, but it can also be captured and used as a cleaner energy source to for instance create electricity," Haan added.
"That is what we want to do. We know that there is gas, but we do not know about the extent of the reserves and if they are commercially viable."
While CBM drilling might sound similar to the controversial fracturing process to capture shale gas, the procedure involving coal gas is quite different.
"First of all, CBM exploitation does not require water or chemicals to be pumped into the ground, and secondly we do not have to drill as deep as one has to in shale gas operations," Zealand emphasised.
Haan and Zealand were not able to elaborate on the cost of the development phase. "It depends on the outcome of the exploration phase," Zealand said.
If the CBM reserves are found to be large enough and commercially viable, the gas could be exported to other countries in the Southern African region, Haan said.
"It also depends how much the exploitation costs, the technological and market risks. Initially, the gas is meant for the local market," he stressed.
"Botswana is an electricity stressed country and is currently importing fuel to power some if its power plants. This is a risk due to price fluctuations and increases."
This article was originally posted on Africa Oil & Mining Network
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