Page 4 - AfrElec Week 05

AfrElec COMMENTARY AfrElec
Botswana’s pushes forward $4bn CTL pitch
Botswana wants to build a $4bn coal-to-liquid (CTL) project to boost fuel security and monetise its coal assets, writes Richard Lockhart
BOTSWANA
WHAT:
Botswana is con dent it can accelerate its $4bn coal-to-liquid (CTL) tender
WHY:
The country aims to diversify its fuel business and ensure energy security
WHAT NEXT:
The government has hinted at Chinese interest, but no major backer has yet come forward
BOTSWANA is to fast-track its ambitious $4bn coal-to-liquid (CTL) tender in a bid to monet- ise the country’s extensive coal reserves and to reduce emissions.
Speaking at the Mining Imbada in Cape Town on February 4, Botswana Mineral Resources Minister Lefoko Maxwell Moagi said: “It (the CTL plant) is still in its infancy stage, but we believe now it will be accelerated,” Reuters reported.
e government aims to have the plant on stream by 2025 in a bid to boost energy security. State-owned rm Botswana Oil (BOL) originally issued a tender in 2017 to seek investors.
e government’s e orts to push the scheme forward comes a er it launched the original ten- der for the CTL project in 2017.
Moagi said that Botswana’s coal reserves, which he described as “God’s gi ,” amounted to 212bn tonnes. is compared with the country’s demand for petroleum products of 1.2bn litres per year, all of which is imported, mostly from South Africa.
e government is looking to convert coal to liquids, which involves producing synthetic diesel, gasoline and other fuels, and to push for- ward a 100-MW pilot coal-bed methane (CBM) project.
“We believe coal has also got a bene cial way of being exploited without adding to the carbon footprint. We can convert it in coal-to-liquids, we can convert it to gas, we can do a lot of things with coal and these are the things we will be exploiting fully,” Moagi said.
Investment
Technology and funding are key issues for Bot- swana as it attempts to exploit its coal reserves.
Moagi said that some banks, which he did not name, had shown interest in the projects, and that Chinese firms remained potential nanciers.
e country’s e orts to attract investment contrast sharply with the current pushback by banks and investors against coal.
BlackRock’s recent decision to regard climate risk as an investment risk, reduce its exposure to coal and to lobby company boards to commit to climate change targets is now being followed by
more and more investment houses and banks. In terms of technology, Sasol in neighbour- ing South Africa is a leading exponent of CTL
technology.
Moagi said that his government had held pre-
liminary discussions with Sasol, whose Secunda re nery currently supplies South Africa with millions of litres of synthetic fuel each year.
In 2017, when the government first announced the tender, 11 potential bidders expressed interest.
e project is Botswana’s second proposed CTL venture. In 2019, Kibo Energy and Shumba Energy formed a joint venture with China’s Wison Group and Power China International to build a separate CTL plant at a cost of $1.5-2bn. is would produce 20,000 barrels of diesel and 5,000 barrels of gasoline per day for export.
This would use coal from Shumba’s Mabesekwa coal project, which has 1bn tonnes of reserves, and where there are plans to develop a 300-MW coal power plant to supply the CTL production plant and a separate 300-MW coal- red IPP.
Shumba is also looking for funding and has courted Chinese investors.
CBM projects
We can convert it
in coal-to-liquids,
we can convert
it to gas, we can
do a lot of things
with coal and
these are the
things we will be
exploiting fully
Maxwell Moagi Botswana Mineral Resources Minister
Meanwhile, Moagi told the Mining Imbada that his government also expected to nalise power purchase agreements (PPAs) this year for a 100- MW pilot CBM- red power plant.
Australia’s Tlou Energy and Sekaname, a sub- sidiary of Botswana’s Kalahari Energy, are com- peting for the rights to develop 100 MW of IPP capacity using CBM from their separate CBM projects.
An initial tender failed in 2019, as the govern- ment ruled that neither bidders quali ed, as they were not yet producing CBM.
However, Tlou has completed gas production tests at its Lesedi CBM project and has o ered to send electricity to the Botswana grid for $0.12 per kWh from a 100-MW IPP project.
Sekaname has gas exploration licences in the Central Kalahari Karoo Basin, and has sim- ilar plans to develop a 100-MW power plant, although it has not made public its per kWh tari .
P4
w w w . N E W S B A S E . c o m Week 05
06•February•2020