Botala is building a gas business with ESG values at its core

• Botala is building a gas business with ESG values at its heart in order to make a positive impact in Botswana
• Hybrid power generation – combining solar with gas – and renewables have been in the works from its IPO days
• Project Pitse progressing with all pilot wells to be drilled before Christmas

 

There is little doubt that building a commercial gas business underpins Botala’s efforts at its Serowe coalbed methane project, but every decision is also made with the goal of doing good by its stakeholders in Botswana.

The company is currently focused on progressing the Project Pitse pilot production program at the Serowe project, which seeks to determine the commercial flow-rate potential within the surrounds of the Serowe-3.1 well that was spudded back in July 2021.

Production testing of Serowe-3.1 has since resulted in the flow of gas to surface with the well being flared last month, proving that the targets coals have opened up and are now degassing.

“It gives us a whole bunch of useful data for Project Pitse, which is the commercial pilot program,” Botala Energy (ASX:BTE) chief executive officer Kris Martinick told Stockhead.

“It gives us a lot of confidence that we are going to get a commercial flow rate.”

This certainly bodes well for the four well pilot program, where drilling is currently underway on the second well and the remaining two wells expected to be drilled by Christmas.

Martinick says this will pave the way for the company to start production testing of the four pilot wells by the end of Q1 2024, a process which could take several months before flow rates are established.

He adds that a separate pilot is also planned to be drilled around the Serowe-7 well about 26km away.

 

A point of difference

Botala’s eagerness to get Project Pitse flowing gas is centred around the shallower Serowe coal seams that are fairly prolific in its acreage.

While the company is not the only company developing coal seam gas in the region — with fellow ASX-listed company Tlou Energy (ASX:TOU) being a notable example — they produce gas primarily from the lower Morupule coal seam and a bit of the upper Morupule coal seam.

“Our key differences is we get the higher Serowe coal in our area, which is what is giving us the good gas flows,” Martinick said.

“It is shallower, cheaper to drill, has a higher saturation of gas and the water quality is better.”

 

ESG governs Botala’s values

The higher quality of water produced as part of the de-watering process segues into Botala’s ESG policy statement governing its values.

As part of this, the company seeks to derive as much as value as possible through the value chain of the gas field, which includes looking at options to use the water for things like crops rather than just letting it evaporate.

“We don’t want to be just a gas player, we actually want to set ourselves up as a company that is going to stick around and add value through integrating into the strategic plans that Botswana has in place,” Martinick told Stockhead.

“Our vision is to not just to supply the gas and provide some form of energy security, but is actually how do we review their plans – which we have done – and say to the Botswana government, look we have reviewed all your plans, here’s what we think we can support and where we can’t.

“We are not going to change your plans, but we think we can help strengthen them and we can help you realise those plans.”

He added that the company also wants to impact the UN’s 17 sustainability goals and has done assessments to ensure that what it does involves the community.

 

Renewables playing a role since Day 1

“Even in our IPO prospectus, we have never said that we are a straight gas company. While everyone else is trying to transition to renewables, we were always going to try for the hybrid approach and renewables,” Martinick said.

“We are looking at this energy transition space and places like Botswana are not going to stop climate change, but they are going to need to become climate change resilient so they need to be protected from energy security shortages, food shortages.”

As part of this, the company intends to commercialise Serowe with a 20-megawatt pilot solar gas hybrid system near Serowe town, which not only reduces CO2 emissions but reduces the cost of electricity produced when the sun is shining.

This system will use gas to generate power after dark or on overcast days as batteries are still too expensive.

Should this pilot prove successful, the company will progress developing or taking a part in larger hybrid systems as well as entering into the solar panel manufacturing business.

The latter business, which will be carried out in partnership with Solar Finland, will be located at the company’s planned 1,520ha Leupane Energy Hub & Industrial Park.

Botala believes this also presents a fantastic opportunity for the company to attract users to the hub, where it can offer them gas and/or electricity produced using a full-scale hybrid system.

“Our proposed Solar Panel Manufacturing Plant will have a fully automated fabrication line of the highest quality, giving us a cost competitive edge whilst bringing down the cost of labour,” Martinick said.

“We only need 33 jobs, but it is also the job multiplier that’s pretty important. You get four plus jobs for every person we employ from the community.

“It is not our main business, that’s the gas and developing the energy part of it, but at the same time we want to attract industry to the area, and we want to attract jobs and complementary industries in the energy space or clean energy consumers.”

He adds that the company is always looking for partners to drive initiatives outside of its core business, which could help alleviate Africa’s ongoing energy crisis.

 

 

This article was developed in collaboration with Botala Energy, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post Botala is building a gas business with ESG values at its core appeared first on Stockhead.

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