First coal to liquid project attracts 11 bidders

Isaac Pinielo | Friday September 22, 2017 15:40

According to BOL’s government and stakeholder relations manager, Matida Mmipi submissions for the tender will be evaluated and if a suitable bidder is identified, they will enter into contract to develop the coal to liquids plant.

It is anticipated that, to ensure increased chances of developing the project, at least one tenderer will be engaged. Mmipi said following the close of the tender on August 24, 2017, the evaluation process should take approximately two months to complete. “This would then be followed by negotiations and contracts signing,” she said.

She noted that the project, if implemented will ensure the security of supply of petroleum products for Botswana as the country will be able to produce its own fuel to augment what it imports. According to BOL estimates, it will cost about $4 billion (P40 billion) to build a CTL plant in Botswana, but government does not have the finances, hence the invitation for private companies to carry-out the project with the state oil company being the off-taker.

The plant is anticipated to cater for at least 75% to 80% of the 1.2 billion litres consumed annually, with the remaining 20% to 25% being reserved for renewable energy projects, which would include biomass, and jatropha. “The project will also create a lot of, both direct and indirect, jobs that could be created and sustained during the operations and maintenance phase of the facility,” said Mmipi.

She also noted that the project will require that additional mining of coal be undertaken, adding that it will promote broad-based and meaningful participation of citizen-emerging companies in the oil and gas industry.

“At BOL, we believe that this project will greatly support the country’s economic diversification drive, creating jobs, reducing our import bill and the monetisation of coal reserves,” she said.

The CTL process involves conversion of coal into liquid fuels, including chemicals using several liquefaction processing to produce products such as petrol, paraffin, diesel, liquefied petroleum gas (LPG), ammonia, wax and chemicals.

BOL says it is aggressively promoting the development of CTL as it brings immense benefits for the country, including the creation of an estimated 4,000 to 5,000 jobs as well as potential for exports, creation of newer industries and educational opportunities.

Botswana has over 212 billion tonnes in coal resources, but has only one operating coal mine.