Zim sits on massive gas reserves

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SERIOUS exploration for coalbed methane (CBM) gas reserves is gathering momentum in Lupane and surrounding areas of Matabeleland North province despite financial and shareholding problems that are still to be thrashed out among major players, mining executives have told the Zimbabwe Independent.

Faith Zaba

The executives said Discovery Investments, which has a special grant to do the exploration and drilling in the Lupane-Lubimbi basin, was making progress although some shareholder issues have arisen as a result of the Zimbabwe Mining Development Corporation (ZMDC) trying to muscle in to partner private sector investors.
If properly developed, the Lupane-Lubimbi basin gas fields will be a major economic boost to a country which has gone through serious problems in the past 15 years, including hyperinflation, a meltdown, temporary rebound and now de-industrialisation leading towards recession.

Mining investors who spoke to the Independent this week said benefits from Zimbabwe’s gas reserves, worth billions, are expected to yield returns that exceed those from diamonds in Marange and platinum mining.

In a paper prepared by local geologist, Norman Mukwakwami in 2013, findings showed Zimbabwe’s gas reserves are actually more than those of all other countries in the region combined. Sadc gas resources amount to 420 billion cubic metres of CBM, while it is estimated that Hwange and Lupane areas have over 800 million cubic metres per square kilometre.

This amounts to 765 billion cubic metres of sulphur-free CBM, but some geologists believe reserves could run to over a trillion per cubic kilometre, suggesting Zimbabwe could have one of the largest reserves in the world, alongside Canada, Russia and China.

Five companies have been involved in the exploration for CBM in Zimbabwe – Shangani Energy Exploration, a subsidiary of Zimasco in partnership with the Chinese; Afpenn Lupane Developments; Terra Firma; China-Africa Sunlight Energy (a partnership between the military and the Chinese) and Discovery Investments.
However, only two companies have made major inroads — Shangani Energy, which is currently finalising exploration, and Discovery Investments that has finished exploration and is now drilling. It has so far dug three wells.

Discovery finished exploration in June last year and by August three wells had been sunk. These have since shut down due to lack of funding. The company needs US$12 million to do a bankable feasibility study under which it will dig another 12 wells to determine the commercial viability of the project.

Mines minister Walter Chidhakwa told the Zimbabwe Independent in a recent interview gas could unlock the country’s economic potential. “Gas has lots of downstream benefits which can have a big impact on the economy,” he said. “One of the companies involved has been pumping gas for six months with purity levels which are above 97%. You can fire power generators with gas. You can get gas which is the third cleanest source of energy after solar and hydro-electricity. What is also significant is that the cost of production is much lower than the cost of thermal power.”

“It is not just about cleanliness and cost, but also the gestation period because the moment you have a gas well and you put a generator up, it has one of the shortest gestation periods. You are going to have a hydropower station in three to four years and a thermal power station the same period, but with gas it can be much, much less; maybe two years or less. With water problems in Matabeleland region, gas mining also provides opportunities for irrigation and so forth. The second is the fertiliser, ammonium nitrate. Currently we produce that at Sable Chemicals through a technology of electrolysis, which is a huge consumer of power. That is why it is important to move from that technology to gas.

“Third, we also get explosives and nitrogen from nitrate. We can also produce explosives from nitrogen for the mining and construction sectors. And fourth, we are also looking at conversion of gas to liquid petrol and diesel. Relevant technology has been developed to deal with that.”

Discovery executive chairman Lloyd Hove said Zimbabwe has enough gas to supply the whole region.

“Zimbabwe has enough gas for 200 years, more than 100 years for power generation and 100 years for fuels,” Hove said.

“The potential is huge. The economic future of Zimbabwe is actually in Matabeleland North. The water is ideal for fisheries and flood irrigation for the local communities. They can go into rice production. If we start exploiting, there won’t be any need to import fuels, fertiliser and electricity. Zimbabwe will become a major exporter in the region.”

Hove said his company can go up to 1 000 wells, although the area, which constitutes just 5% of total area with CMB in the country, is ideal for 4 000 wells over a 10-year period.

A well can produce up to two megawatts of electricity.

“Gas is a resource which can make us a major regional player when it comes to fuel and electricity. It needs to be urgently exploited before we are beaten to it by regional competitors,” he said.
“What is key now for Discovery is to come up with a bankable feasibility study to confirm its commercial viability.”

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