Shumba Energy, the local energy developer rapidly building a portfolio of projects in eastern Botswana, expects its recently announced Coal to Liquids (CTL) plant to produce 20,000 barrels of diesel and 5,000 of petrol per day when fully functional.
The plant, which Shumba expects to cost between $1.5 billion and $2 billion (up to P22 billion), is currently undergoing a bankable feasibility study.
Shumba has partnered with PowerChina International Group and Wison Group on the project, which will be powered by a one billion tonne resource of coal located at Mabesekwa in the Central District.
PowerChina International Group and Wison Group are both major Chinese energy players involved in construction as well as engineering.
“The plant will also have the potential for additional production circuits for aviation fuel for airlines, fertiliser for farming, and speciality chemicals (aromatics) for the hydrogen fuel and related energy storage technologies also being pursued by Shumba,” said Kudakwashe Gamba, an official working with Shumba Energy’s investor relations.
She said the project was in line with government priorities such as the diversification of energy supply, reduction of the import bill, extraction of value from abundant coal resources and promotion of alternative industry.
“With the average monthly consumption of 100 million litres, Botswana’s fuel import bill amounts to P500 million
“It is a national imperative to focus on alternative sources of fuel supply in order to reduce Botswana’s dependency on South Africa for fuel and mitigate the potential supply disruptions emanating from the recent civil unrest in that country.”
Shumba’s initiative comes as state oil company, Botswana Oil finalises its own procurement of a CTL project. In 2017, it floated a tender for a CTL contractor, which attracted 11 bids.
At the time, the parastatal said it expected the project to cost up to $4 billion and meet up to 80% of the country’s annual fuel demand.
CTL technology involves the conversion of coal to liquid fuels. CTL projects are considered as ultra-clean liquid fuels because of the “top of the range clean coal liquefaction processes that capture and store potentially harmful emissions from the manufacturing process”.