A new phase of drilling has begun at the Lesedi Gas-to-Power Project in Botswana. In the second week of April 2023, the Australian company Tlou Energy began the work on Lesedi 6 gas production pod.
The latter is located to the southwest and parallel to the existing Lesedi 4 gas production pod. As of the 13th date of April 2023, the Lesedi 6 gas production pod had reached a depth of approximately 59m.
Eventually, the pod will comprise one vertical production well intersected by two lateral wells. The latter will be drilled horizontally through the target reservoir section for several hundred meters. Once the drilling phase is completed, dewatering will commence and thereafter the well will start to establish an indicative gas flow rate.
Noteworthy, Lesedi 6 gas production pod is the first well of a proposed drilling program to expand gas production at the Lesedi Gas-to-Power Project in Botswana. Gas flows from this pod will be converted to electricity. The electricity will be supplied to the Botswana Power Corporation (BPC) under an existing 10MW Power Purchase Agreement (PPA).
New transmission lines, substations, and associated electrical infrastructure are being put in place for this purpose.
Background of the Lesedi Gas-to-Power Project in Botswana
The Lesedi Power Project is a gas-to-power project located in Botswana’s Central District, some 100 kilometers from the existing power infrastructure.
Tlou Energy said that the financing that will be obtained will be used to carry out the project in two phases. The first of which will produce approximately 2 MW of electricity will require an investment, while the second phase with a projected capacity of 10 MW will cost US$ 20M.
Phase one of the project which is estimated to cost about US$ 10M involves transmission line construction, transformer installation, grid connection, procurement and installation of electricity generators, and potentially the drilling of additional gas wells. The said transmission line will run from the Lesedi project to the town of Serowe, a distance of about 100 Km, where it will connect to the existing power grid. This phase will produce approximately 2 MW of electricity.
The 2nd Phase mainly aims to increase the initial electricity production to 10MW and it will involve the drilling of more gas wells as well as the purchase of additional generators. The cost of this phase is approximately US$ 20M.
Upon successful completion of phases one and two, the company plans to expand the project beyond 10MW. This expansion is expected to be completed using project revenues and debt.
Reported July 2019
Botswana to develop coal bed methane-fueled power Plant
The government has revealed plans to develop and pilot a coal bed methane (CBM) fueled power plant. Ministry of Mineral Resources, Green Technology, and Energy Security said that the project was undergoing procurement.
Following the approval of two companies, Sekaname, and Tlou Energy as preferred bidders for the project by the Public Procurement Disposal Asset Disposal Board (PPADB), negotiations with the two companies were due to start in earnest.
“As per the PPDB Act, the outcomes of the negotiations will go through an approval process by PPADB prior to awarding of the tender,” said the ministry in a statement.
Coal bed methane-fueled power plant
According to Tlou, a proposal submission was for the development of CBM-fired power plants up to a maximum of 100MW. It outlined a staged development starting with up to 10MW of power generation to facilitate the success of the downstream project by requiring relatively minimal upfront capital expenditure, thus reducing risk.
The company said that based on the electricity price guide provided by the government in Tlou’s tender of about US $0.12 per kWh, a 10MW project could generate gross revenue of about US$10 million per year.
“The effort put in by our team over recent years has been phenomenal and this result makes it all worthwhile. The company will now progress with additional work on the ground to deliver a gas‐to‐power solution that can bring significant benefits to the country and to our shareholders,” said Tlou managing director, Tony Gilby
The project is the government’s initiative geared towards facilitating the development of the gas industry in Botswana. Coal bed methane is a clean energy source capable of earning the country carbon credits and positively improving the country’s energy mix,
Botswana has a significant energy shortage and generally relies on imported power and diesel generation to fulfill its power requirements.
Reported February 2020
Coal bed methane-fueled plant in Botswana to be operational by 2025
The US $4bn coal bed methane-fueled power plant in Botswana is set to be operational by 2025. This is according to Mineral Resources Minister Lefoko Maxwell Moagi who said the methane plant is also expected to come on stream by 2022
The project is the government’s initiative geared towards facilitating the development of the gas industry in Botswana. Coal bed methane is a clean energy source capable of earning the country carbon credits and positively improving the country’s energy mix.
Methane-fueled power plant
Sekaname and Tlou Energy won the bid for the project from the Public Procurement Disposal Asset Disposal Board (PPADB) and the government has held preliminary discussions with Sasol Ltd. for the refinery project and expects to finalize power purchase deals this year for the pilot power plant
The project will see the construction of CBM-fired power plants up to a maximum of 100MW with the staged development starting with up to 10MW of power generation to facilitate the success of the downstream project by requiring relatively minimal upfront capital expenditure, thus reducing risk.
Botswana has a significant energy shortage and generally relies on imported power and diesel generation to fulfill its power requirements. It hosts 212 billion tonnes of coal resources,
“The effort put in by our team over recent years has been phenomenal and this result makes it all worthwhile. The company will now progress with additional work on the ground to deliver a gas‐to‐power solution that can bring significant benefits to the country and to our shareholders,” said Tlou managing director, Tony Gilby
April 2020
Botswana Power Corporation enters into power PPA with Tlou Energy
The Botswana Power Corporation (BPC) has entered into a Power Purchase Agreement (PPA) with Tlou Energy to pilot the 2MW CBM in the country. The interim PPA is now undergoing final regulatory formalities.
The Company remains in discussions with potential project finance partners who have been waiting to see the interim PPA in place, which facilitates connection to the power grid and the first revenue for the Company. A pathway to revenue generation is key for financiers and once connected to the grid, expansion of the project (and thereby increasing revenue) is seen as a relatively straightforward and largely de-risked process.
The Company submitted a proposal to Botswana’s Ministry of Mineral Resources Green Technology and Energy Security (MMGE) in 2018 for the development of a 10MW CBM Gas-to-Power plant. The 10MW proposal is separate from the 2MW interim PPA. BPC and MMGE continue to assess the 10MW proposal and will advise the Company in due course.
About Tlou Energy
Tlou Energy is focused on delivering Power solutions to Botswana and southern Africa to alleviate some of the chronic power shortages in the region. Tlou is currently developing projects using gas and plans to combine this with solar power to provide a cleaner baseload power source.
Botswana has a significant energy shortage and generally relies on imported power and diesel generation to fulfill its power requirements. Tlou’s Lesedi Power Project provides investors with access to a compelling opportunity to displace expensive, carbon-intensive diesel and imported coal-fired electricity with a cleaner and more environmentally friendly alternative.
In addition to plans for cleaner energy, the company is also committed to developing community projects in Botswana adding real value to people’s lives in a region with sparse services and where few opportunities exist for the local population. This includes work to assist communities to become self-sustaining, develop business opportunities, improve access to education and create opportunities for self-employment and wealth creation.
Reported October 2020
Tlou Energy seeks funds to develop the Lesedi power project in Botswana
Tlou Energy Limited, an exploration-stage company engaged in the exploration and evaluation of assets in Botswana and the southern Africa region at large to identify and develop Coalbed Methane (CBM) resources has announced that it is currently seeking funding for the development of the Lesedi power project.
In a statement, the company noted that it has engaged Botswana Development Corporation (BDC) and the discussions are still ongoing and they hope to successfully conclude the funding proposal. It has also recently received an indicative term sheet for transmission line and transformer funding from a new potential financier. It will assess this offer alongside other potential financiers to evaluate the best possible option and funding partner going forward.
Implantation of the development project
Tlou Energy said that the financing that will be obtained will be used to carry out the project in two phases. The first of which will produce approximately 2 MW of electricity will require an investment, while the second phase with a projected capacity of 10 MW will cost US$ 20M.
Phase one of the project which is estimated to cost about US$ 10M involves transmission line construction, transformer installation, grid connection, procurement and installation of electricity generators, and potentially the drilling of additional gas wells. The said transmission line will run from the Lesedi project to the town of Serowe, a distance of about 100 Km, where it will connect to the existing power grid. This phase will produce approximately 2 MW of electricity.
The 2nd Phase mainly aims to increase the initial electricity production to 10MW and it will involve the drilling of more gas wells as well as the purchase of additional generators. The cost of this phase is approximately US$ 20M.
Upon successful completion of phases one and two, the company plans to expand the project beyond 10MW. This expansion is expected to be completed using project revenues and debt.
Reported March 2021
Discussions to secure funding for Lesedi Power Project in Botswana ongoing
Discussions to secure funding for Lesedi Power Project in Botswana are currently ongoing. Tlou Energy, the company behind the project has been working with a number of parties to secure funding. The Company is seeking project finance to build a transmission line from the Lesedi power project to the existing electricity grid as well as electrical substations, gas, and solar generation assets.
The most advanced project finance discussions are currently with a very reputable Botswana-based entity. Due to confidentiality, the Company is unable to name the entity concerned at this time. However, the company can confirm that their investment committee and board have discussed and are favorably disposed to Tlou’s proposal. They are now proceeding to get a third-party technical review of the project as part of their due diligence process. Once this report is assessed an investment decision can be made.
Project Finance
The Lesedi project is proposed to be developed in two phases. Phase one involves transmission line construction, sub-stations, grid connection, electricity generators, and potentially the drilling of additional gas wells. The 100 Km transmission line will run from the Lesedi project to the town of Serowe where it will connect to the existing power grid. Initial generation is proposed to be up to 2MW of electricity. Funding required for phase one is US $10m which can be staged if necessary or prudent to do so.
Phase two funding is for the expansion of electricity generation up to 10MW. This will involve drilling gas wells and the purchase of additional electricity generation assets. Funding required for phase two is US $20m. Upon successful completion of phases one and two, the Company plans to expand the project beyond 10MW.
10MW Tender negotiations
As expected, the Company has received correspondence from advisors assisting the Government of Botswana in the execution of their Coal Bed Methane (CBM) program for the development of up to 100MW of CBM-fueled pilot power plants.
This is a positive development with further discussions planned. The Company aims to progress this matter as quickly as possible.
March 2021
TLOU Energy to raise US $2.6m for Lesedi power project
TLOU Energy is planning to raise US $2.6m for the Lesedi power project in Botswana. The funds are expected to go toward the construction of a 66KV transmission line from the project to the existing electricity grid at Serowe and toward field operating costs and ancillary equipment.
The TLOU Energy Lesedi power project is set to be developed in two phases. Phase one involves transmission lines construction, substations, grid connection, electricity generators, and potentially the drilling of additional gas wells. Initial generation is proposed to be up to 2MW of electricity. Funding required for phase one is US $10m which can be staged if necessary.
Phase two involves the expansion of electricity generation up to 10MW. This will include the drilling of gas wells and the purchase of additional generation assets. Funding required for phase two is US $20m. Upon successful completion of phases one and two, the company plans to expand the project beyond 10MW.
Funding discussions
Early this month, the company announced that funding discussions with a number of parties were ongoing. The most advanced project finance discussions were with a very reputable Botswana-based entity. Due to confidentiality, the Company was unable to name the entity concerned at the time.
However, the company confirmed that their investment committee and the board had discussed and were favorably disposed to Tlou’s proposal. They were proceeding to get a third-party technical review of the project as part of their due diligence process. Once the report is assessed an investment decision can be made.
April 2021
Financing of the Lesedi power project in Botswana is almost finalized
Lesedi Power Project finance discussions are at an advanced stage with a very reputable Botswana-based entity. According to Tlou Energy, due to confidentiality, they are unable to reveal the entity concerned at this time. However, they can confirm that their investment committee and board have discussed the project financing and are favorably disposed to Tlou’s proposal. They are now proceeding with a third-party technical review of the project as part of their due diligence process. Once this report is assessed an investment decision can be made.
The Company is seeking project finance to build infrastructure to connect the Lesedi power project to the existing electricity grid in Botswana. This infrastructure includes transmission lines, electrical substations as well as the installation of gas and solar generation assets.
Lesedi power project
The Lesedi power project is proposed to be developed in two phases. Phase One involves transmission line construction, substations, grid connection, electricity generators, and potentially the drilling of additional gas wells. The 100km transmission line will run from the Lesedi project to the town of Serowe where it will connect to the existing power grid. Initial generation is proposed to be up to 2MW of electricity. Funding required for Phase One is US $10m which can be staged if necessary or prudent to do so.
Phase Two funding is for the expansion of electricity generation up to 10MW. This will involve drilling gas wells and the purchase of additional electricity generation assets. The funding required for Phase Two is US $20m. Upon successful completion of Phases One and Two, the Company plans to expand the project beyond 10MW.
During the quarter, the Company successfully raised gross proceeds of US $3.6m pursuant to the placing of 75,000,000 new shares at an issue price of 3.5 pence per share. The funds raised are planned to go towards the commencement of transmission line construction. While this work proceeds, Tlou will also continue its negotiations with other financiers for further development of the Lesedi project.
May 2022
Construction of transmission line connecting the Lesedi Power Project to the National grid begins
Construction on the transmission line that will connect the Lesedi Power Project to the Botswana power system has begun. Zismo Engineering Pty Ltd has performed the basic work, and the path is being cleared of trees. Site handover, collecting the project team and resources, mobilization of machinery and equipment, line survey and design, pole structure modeling, and evaluation and approval by Tlou‘s Owners Engineer, Mott MacDonald, were all part of the preliminary work.
Zismo has also begun equipment procurement, which includes the fabrication of steel and timber poles, cross arms, line hardware, fittings, stay wire, and assemblies. The equipment will be supplied in phases, with the first shipment of wooden poles arriving next month. The project site offices of Zismo have been established in Mogorosi hamlet, and a roving site camp will be established at strategic sites along the transmission line route.
Developments around the Lesedi Power Project
Work began with route preparation, which included the previously stated bush clearance and the installation of farm gates where needed, line pegging, inspection, and approval. The poles will be erected in parts, beginning at the Serowe end of the line and progressing to Lesedi. Work on the first portion is scheduled to begin around the end of June, with work on section two beginning at the end of September 2022.
The line will employ around 650 wooden poles and 80 steel structures, which will need excavation, placing, assembly, dressing, planting, backfilling, and compacting, followed by stringing, tensioning, and regulating. This will be followed by testing, commissioning, and line energization.
The transmission line is projected to be finished in mid-2023, with the substations at each end likely to be completed in the second half of 2023. Following that, the sale of power may begin. Tlou’s Managing Director, Mr. Tony Gilby, stated that it was excellent to have the transmission line work started in the field.
