Sasol, Origin unveil venture to explore coal-bed methane in Botswana

Ebbie Haan

South Africa’s Sasol Petroleum International (SPI) and Origin Energy Limited, of Australia, announced the formation of a joint venture (JV) on Tuesday to explore for coal-bed methane opportunities in Botswana.

Coal-bed methane was the natural gas found within coal seams and in the past it had typically been released into the atmosphere during the coal mining process for safety reasons.

The JV, known as Kubu Energy Resources, was unveiled in Cape Town by SPI MD Ebbie Haan and Origin Energy’s Paul Zealand. Origin Energy is leading power producer and energy retailer in Australia.

Kubu Energy Resources, meanwhile, had already signed an agreement to acquire three prospecting licences in Botswana from a local coal-bed methane exploration company, Sekaname. The licences were bought from Sekaname for an undisclosed amount and covered an area of roughly 3 000 km2 in central Botswana, which is at this stage mostly open bushveld with some pastoral agriculture.

However, SPI manager for unconventional resources Liesl Marriott said the licences were still subject to approval by the Botswana government.

At this stage, the JV was committed to an exploration period of two to three years, which would involve geophysical surveys and include the drilling of five exploration wells. Should the first exploration phase prove successful, the partners would then consider committing to a more extensive exploration programme.

“South Africa is critically dependent on coal resources for its energy supply and as part of Sasol’s overall drive to diversify the feedstock for our economic growth in the country and the region we are pursuing a wide range of natural gas opportunities,” said Haan.

He added that the project had been motivated by Sasol’s success in Mozambique where the company had been producing natural gas and piping it to South Africa since 2004.

There were currently no estimates for the gas reserves that may be available in Botswana, but Haan said some outside agencies had assessed quite significant resource potential for the coal-bed methane deposits. This was no guarantee of success, but with the market potential expanding with energy demand he added that “we’re willing to take that risk”.

Should gas be found and ultimately production become possible, potential markets would be Botswana, which currently imports feedstock for some of its power plants, and also South Africa. “If it really goes very big, considering a pipeline into a chemicals plant or even into South Africa into our synthetic fuels business, might be options as well,” Haan said.

Part of the value being attributed to coal-bed methane lay with the fact that the resource was considered to be a cleaner energy source than coal and did not require as much water to extract as would be the case in the mining of shale gas. Rather water is removed from the coal seams in order to extract the gas during the production process.