Chronicle (Zimbabwe)

Lupane gas reserves: The missing link

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produce hydrogen, which in turn is used in the manufactur­e of ammonia for fertiliser. Fertiliser maker, Sable Chemicals, has also hinted on plans to transform its production processes to using gas as opposed to high cost electricit­y.

Ironically, Zimbabwe still imports the product mainly from South Africa, years after discoverin­g its own reserves. Imports contribute to the widening trade deficit estimated at $3 billion annually.

Although the Government granted the exploratio­n of gas a National Project Status in 2007, it did not take off until 2014.

To date, no concrete steps have been put to guarantee quick benefits to the economy. Lupane Gas, a unit of the Industrial Developmen­t Corporatio­n (IDC) that has been doing some exploratio­n work on one of the resource sites has failed to raise the $12 million required to prove whether the resource is commercial­ly viable or not. Hwange Colliery Company Limited has also failed so far to grab the opportunit­y to diversify its operations by exploiting gas in its Lubimbi coal concession­s. Another company, China Africa Sunlight Energy has, since 2014 when it launched its $2.1 billion project, failed to bring tangible results. The firm had proposed to invest in gas wells for power generation as well as setting up a 600MW thermal power plant.

So far Discovery Resources is the only company that has made progress at its concession­s in Siwale area in Mzola, Lupane. After successful exploratio­n work in the last two years, the firm has started producing gas, which engineers say is ready for commercial exploitati­on. Vice President Phelekezel­a Mphoko visited the site last Friday where he was briefed about progress on the plant.

However, key shareholde­r Mr Thabani Lloyd Hove told the VP and his delegation that the gas they were producing could only be used for industrial purposes as it needed to be purified further to be suitable for domestic use. He stressed the need to develop a value chain approach and relevant infrastruc­ture, which requires more investment and partnershi­p.

Besides gas for electricit­y generation, Mr Hove said more investment opportunit­ies lie in downstream industries such as production of a variety of chemicals, fertiliser production and gas to liquids producing diesel, specialist lubricants and waxes. The country does not have this model for investment at present.

With estimates indicating that Zimbabwe has 40 trillion cubic feet of potentiall­y recoverabl­e gas in the Lupane-Lubimbi area, probably the largest in Southern Africa, a successful exploitati­on of the resource could place Zimbabwe in the league of this billiondol­lar industry in the region and abroad. This requires a quick response in aligning the gas infrastruc­ture, which is non-existent at the moment, with that of electricit­y. VP Mphoko has said gas production was a low hanging fruit that could transform the country’s economy. He pledged to engage the relevant ministries to come up with a relevant legislatio­n to support the new industry and investment along the value chain.

Matabelela­nd North Provincial Minister of State Cain Mathema said the power utility, Zesa, should be roped in to partner gas companies as it would be the primary beneficiar­y of power generation. He said the project required a multi-sectoral approach that provides for the involvemen­t of the local community for it to yield adequate and sustainabl­e results. Mines and Mining Developmen­t Deputy Minister Fred Moyo said the Special Economic Zones model, whose law has since been passed by President Mugabe, provides the framework for developing robust value chain industry for gas.

Obtaining quick gains from this resource would not come easily outside robust lobbying, creation of an enabling legislatio­n and partnershi­p with potential investors. This is crucial given that Zimbabwe is not the only country with these reserves. A 2016 baseline study on Sadc energy sector shows that the entire region is endowed with significan­t deposits of coal and associated methane gas, crude oil, shale gas and natural gas.

About 15 African states are already involved in natural gas production with major players being Algeria, Nigeria, Libya, Mozambique, Tanzania and Equatorial Guinea.

South Africa, Angola, Morocco, Tunisia and Ivory Coast are some of the notable producers. Last year Egypt also discovered its huge natural gas reserves off its coast – the largest find in the Mediterran­ean Sea, media reports said.

Delays in operationa­lising the exploitati­on of these reserves deprives the country of opportunit­y to diversify its energy mix, reducing the cost of energy and improving its accessibil­ity to consumers as well as reducing carbon emissions, which are blamed for causing global warming and climate change. In view of competitio­n for investment and markets, Zimbabwe needs to move with speed in addressing highlighte­d barriers.

More investment should be directed to robust exploratio­n work to increase the size of proven reserves, developing the necessary human skill and the establishi­ng the requisite infrastruc­ture such as pipelines, storage and refining facilities to enhance capacity and safe extraction of the resource. On these, the country is heavily found wanting.

 ??  ?? Vice President Phelekezel­a Mphoko tours a methane gas extraction site in Lupane recently
Vice President Phelekezel­a Mphoko tours a methane gas extraction site in Lupane recently
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