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Sasol and Origin Energy form JV for coal bed methane exploration in Botswana

Sasol recently signed a joint venture agreement with Australia-based Origin Energy Limited for the purposes of exploring for coal bed methane (CBM) in Botswana. The partners say that discovery of large volumes of CBM in Botswana could be used to generate power and liquid fuels in southern Africa.

The joint venture, through Sasol Petroleum International Pty Limited (SPI), the wholly owned upstream oil and gas subsidiary of Sasol Limited, will be known as Kubu Energy Resources (Pty) Ltd (the Kubu Joint Venture). “Kubu” means hippopotamus in Setswana, the language of the people of Botswana.

Sasol and Origin, via the Kubu Joint Venture, have signed an agreement to jointly acquire three prospecting licences in Botswana namely PL134/2010, PL135/2010, PL136/2010 from Sekaname (Pty) Ltd, a local CBM exploration company, based in Gaborone. The transaction is subject to final approval by the Botswana government.

The three prospecting licences cover an area of approximately 3,000km² and are located in the Central province of Botswana. The joint venture partners plan to conduct a number of exploration activities in the licence area during the next two years to determine the quantity of natural gas available and the feasibility for future commercial development. The first phase of the exploration will include an airborne magnetic survey, sampling of borehole cores and the drilling of test wells.

If the first exploration phase proves successful, the joint venture partners will consider committing to a more extensive exploration programme in Botswana.

CBM production is a process of desorbing natural gas from coal using wells drilled for that purpose; the process of production is similar to the mine safety processes used in degassing coal mines. The water that is produced during the production process is pumped to the surface and treated so it can be disposed of or recycled. Although CBM is produced by unconventional means it is sold and used in the same manner as conventional natural gas.

CBM exploration is still in the early stages of development in southern Africa. However, CBM accounts for approximately 10% of total natural gas produced in the United States and makes up most of Australia’s natural gas supply. Australia’s coal bed methane resources (known as Coal Seam Gas or CSG in Australia) will be used to supply LNG to China and the rest of Southeast Asia.


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