Tlou Energy is planning to sell its gas to power solution to the whole Southern Africa, once it succeeds in setting up its first scalable project.
All of that will cost money, and at present, in order to make money from its gas reserves, Tlou will need to connect to the regional electricity grid in Botswana, and this process is already well advanced.
Tlou Managing director, Tony Gilby noted in a statement released last week that the company could also sell power to neighbouring countries by ‘wheeling’ electricity through the existing Southern African Power Pool (SAPP) transmission network.
“Entry to the grid is planned at the town of Serowe, a relatively short distance away from the proposed Lesedi gas processing and power generation facility,” he said.
In addition, the company is assessing the possibility of installing solar power generation at the proposed Lesedi gas processing and power generation facility, something which the company says is very compatible to the gas operation.
The company and its hopes for a viable business case are buoyed by the acute need for power in Botswana and the region, as well as possession of a 25 years mining on over 8000 square kilometers.
Additionally, Tlou has greatly increased the estimates of its gas reserves with the 2P (Proved and Probable) Gas Reserves increased 944% to 40.8 billion cubic feet while Proven, Probable and Possible (3P) Gas Reserves increased by 63 percent to 426.6 billion cubic, after an independent certification by SRK Consultants.
Tlou has a 100 percent interest in and operates ten prospective coal bed methane in Botswana including License ML 2017/18La part of the Lesedi project in the Karoo Kalahari Basin, which contains a significant portion of Southern Africa’s coal deposits.
Gilby said that a recent significant upgrade in gas reserves reinforces the commercial viability of the company’s Lesedi and Mamba projects.
“The recent seismic survey and core drilling campaign, along with Selemo pilot wells producing sustained gas flows for a substantial period of time, confirms that there is huge gas production potential for Tlou’s area,” said Gilby.
However, the Botswana Government’s decision to go for re-tender to Request For Proposal bidders could mildly frustrate the executives at Tlou, even in the face of a clear near term roadmap, including potential rig purchases to provide more operational control, additional core hole drilling and seismic data acquisition, and the targeted commencement of initial development drilling in mid-2018.
On 3 April 2017, a Mw 6.5 earthquake occurred in Botswana, representing the second strongest earthquake registered since 1949. Such an intraplate event occurred in a low seismic hazard area and was suspected to be an artificial earthquake induced by nearby gas extraction.
In a research paper published in October 2017, on MDPI.com a platform for peer-reviewed, scientific open-access journals operated by MDPI AG, based in Basel, Switzerland ruled out the earthquake as a result of human activity but warned that more investigative work needs to be done to quantitatively assess the stress perturbations of gas extraction activities in Botswana.
“We estimated the geometric and kinematic characteristics of the causative fault from the modeling of Sentinel-1 In SAR interferograms. Our best-fit solution for the main shock is represented by a normal fault located at a depth greater than 20 km, dipping 65◦ northeast, with a right-lateral component, and a mean slip of 2.7 m. The retrieved fault geometry and mechanism are incompatible with the hypothetical stress perturbation caused by the anthropogenic activities performed in the area. Therefore, the 3 April 2017 Botswana earthquake can be classified as a natural intraplate earthquake,” wrote researchers, Matteo Albano and Marco Polcari.