Tlou Energy Limited (LON:TLOU) has achieved ‘first power’ from its coal bed methane (CBM) project in Botswana, where the Lesedi gas field is hooked into generators.
The company describes it as a ‘significant milestone’ which is evidence of the group’s ability to deliver power from, and therefore further monetise, the CBM gas resource.
WATCH: First power from Botswana CBM 'a very significant development' for Tlou Energy
"First Gas-to-Power via CBM in Botswana is an extremely significant milestone for the Company and in effect a proof of concept of 'first gas monetisation',” said Tony Gilby, Tlou managing director.
Cleaner than coal-fired power
Gas has been produced in the Selemo area of the Lesedi operation for around a year, and overall Lesedi is estimated to host some 3.2 trillion cubic feet of gas. It is the most advanced CBM asset in Botswana, Tlou highlighted.
Tlou also noted that CBM based power generation is ‘cleaner’ than coal fired power, and highlighted that by using CBM to power generators it will reduce the group’s own spend on diesel.
Gilby added: “This is the first power generated from CBM in the country and this achievement reinforces our view that CBM Gas-to-Power is achievable in Botswana using gas from the Lesedi Project.
“CBM gas is a cheaper and cleaner alternative to diesel generation and is significantly cleaner than coal fired power generation."
Reducing fuel purchasing costs at Selemo
Detailing the operation, Tlou said that the power needed for the Selemo pilot project had been provided solely by diesel generators before the company redirected gas from wells, which would otherwise be flared, it has now been able to replace one of the diesel generators.
It expects to replace another diesel generator in the near term, which will save further fuel costs at the project.
The company said that it expects it will initially reduce its diesel requirements by around 50,000 litres per year, and its savings should grow over time as the second gas generation unit is installed.