Chinese refiner warns BOL against CTL investment
Lewanika Timothy | Thursday June 6, 2024 11:38
Synfuels China, a major oil refiner with operations in China, Mongolia, and Taiwan, presented this week to a technical team of local research institutions and investment agencies.
Officials from Synfuels said the CTL project will involve uphill costs as Botswana’s coal contains a lot of ash, and the cost to wash off the ash will affect efforts to make the project profitable.
“The quality of the coal is not good and that’s my main worry,” said Synfuels chairperson and founder, Yongwang Li. “It will take a lot of resources to bring down the ash content and the economics won’t be good for this project.”
The ash content is a measure of inorganic impurities that impede combustion during the transformation of coal to fuel.
“It’s going to be a disaster for you. “Even if you have a plant that can wash down ash content in coal, the question is the capacity it can take. “Botswana should evaluate all these issues but the economics is not good,” he said.
Known as Ikaegeng XTL (coal-to-liquid), the ambitious project, which could cost up to P30 billion to set up, has been in the works for about a decade and has climbed up the levels of priority in government. A previous attempt by government to self-finance the project was abandoned in July 2021 in favour of the PPP arrangement. At that time, Botswana Oil had a list of 11 companies, which it later whittled down to a shortlist of two.
The push to accelerate the country’s fuel sources comes as local supply comes under pressure from troubles in South Africa’s (SA) refining capacity. SA, which supplies nearly all of Botswana’s petroleum products, has suffered a rapid loss in refining capacity with several major plants suspended or ageing out of use. Trade imbalance which has weathered SA’s oil supply has turned it into a net importer rendering it an unsteady supplier to Botswana.
The progress on Ikaegeng comes as Botswana Oil takes over 90% of the country’s fuel imports, which authorities say will boost its ability to secure the best price, improve stability and diversity of sources and allow for citizen economic empowerment in the sector.