Tlou Energy has spent about $50 million in the Lesedi Coal Bed Methane (CBM) project as the company targets to provide power to the national grid by 2019, a senior official has disclosed.
The company’s Executive Director, Gabaake Gabaake, said the CBM project is progressing in earnest. He said they are starting by drilling small quantities which will be increased with time.“Our plan is to start with a small pilot project delivering power to Serowe and we hope to supply 50 or 100 megawatts depending on what the government would have approved.
We hope to get the first power into the grid during the second half of 2019 and we think that is possible,” said Gabaake. The former Permannet Secretary in the minerals ministry was speaking at the resources conference this week.
Tlou Energy is an AIM and ASX listed company focused on delivering power in Botswana through the development of coal bed methane projects. The country’s first gas company has over 8300 square metres of exploration land in the Karoo Kalahari Basin, south-eastern Botswana some of which they intend to convert to a mining lease.
Gabaake said the Lesedi CBM Project has proved to be commercially viable and is set to add power to Botswana which has been battling with a severe energy shortage and is currently relying on expensive imported power and diesel generation to deliver its requirements.
He added that numerous exploration and appraisal work programmes have shown that the project is going to be sustainable and since last year, gas has been flowing at the site.
“We are sitting fairly on a substantially, independently certified gas reserves and there has been gas flowing since last year,” he said. He stated they will be submitting a business proposal to the government next month on the 12 of July. Gaabake added that the government has been supportive in the development of CBM as they see it as the catalyst that can further grow the mining industry in the country.
Botswana’s power demand is to increase by 37 percent to 1,017MW by 2025 and analysts say there is a need to invest in power production. The cost of producing gas is half what is needed to produce the same megawatts when using coal. “We are able to deliver energy to the grid at the price that is reasonable,” said the official.
According to a study, the baseline capital cost per KW of gas is half that of coal and the fixed operation and maintenance costs of gas are also half those of coal.