Botswana’s Coal Bed Methane Is Potential Cash Cow

By Sully Manope, Southern African correspondent

Botswana-Magnum-Gas-and-PowerAustralian minnow Magnum Gas & Power sees Botswana’s coalbed methane (CBM) as a far better value proposition than traditional coal, the company’s Chief Executive has remarked. Trent Wheeler says that CBM is a flexible, clean fuel source that can either be used as a gas, or can be converted to diesel or liquid natural gas and can also be compressed and used as a feedstock for ammonium nitrate, which is extensively used in mining explosives in the region.
Magnum Gas & Power has prospecting licenses for Coal Bed Methane over two prospective basins, covering some 2 400 km2 in the country. It also has a Petroleum Exploration Licence(PEL) for conventional oil and gas, covering about 24,300 km2 in Botswana.

Existing Power Generation facilities are awaiting CBM gas, currently running on expensive diesel.

Botswana imports a significant portion of its power, but the availability of imported energy is decreasing. “The demand for power and diesel is growing”, Wheeler says in a corporate presentation. “Two blocks on the Central CBM project area have now been drilled, with the most southern two blocks being our next focus”.Its next plan is to core drill on both southern blocks confirming the expected basin trends and establishing the preferred location for next phase, then drill appraisal well(s) for flow tests, on the preferred area (working to book a contingent resource, and onto reserve certification). The operator has completed pre-feasibility studies on its CBM prospects, which estimated gas-in-place of some 12.6-trillion cubic feet, with about 6.7-trillion cubic feet of that economically recoverable. (Pre‐Feasibility studies completed are based on local core samples, gas measurement and down hole testing).

Wheeler admits that Botswana has a “significant and well known”, traditional coal resource, but believes it would remain a stranded asset until the infrastructure required to transport it to port was developed. The exploitation of CBM, however,  “could also be used to mitigate the region’s energy crisis”.

Magnum is excited that companies like Sasol, Exxaro (JSE listed South African miner) and Origin Energy (a fellow Australian minnow), are working in its neighbourhood.


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