eBusiness Weekly
Africa Moyo
Dealmaker, Sakunda Holdings, has expressed interest in exploiting coal-bed methane gas in Lupane, with reports indicating that negotiations with Government are at an advanced stage.
The Lupane Gas Project, which was granted National Project Status in 2007, has been linked to a number of local and foreign companies for a long time with nothing tangible eventually coming up.
But Deputy Minister for Mines and Mining Development, Engineer Fred Moyo, told Business Weekly this week that a new investor has come to the party.
“We are still talking, I will check with staff if he has returned his proposals,” said Eng Moyo.
Asked who the investor was, Eng Moyo said: “It is Sakunda.”
Sakunda recently supported several Government projects principally Command Agriculture, a programme aimed at boosting mainly maize production, to ensure food security and save the much-needed foreign currency.
The quantum of Sakunda’s investment could not be ascertained by the time of going to print since the fuel supplying firm had reportedly not yet indicated to Government the nature of business it plans to venture into.
Government has given Sakunda the leeway to consider power generation and/or exploiting gas for fertiliser manufacturing.
Said Eng Moyo: ”They (Sakunda) are the ones who know the size of plant they want to come up with and that is what they are working on now.
“The (total) cost should be related to the size of investment so I don’t have the details of what they want to do. For instance, if it is power, what size of power plant (are they building) — megawatts wise — and if it’s going to be gas for fertiliser, what tonnage and so on, and so on.”
Natural gas is a naturally occurring hydrogen gas mixture consisting primarily of methane, but commonly including varying amounts of other higher alkanes, and sometimes a small percentage of carbon dioxide, nitrogen, hydrogen sulfide or helium.
It is a fossil fuel used as a source of energy for heating, cooking, and electricity generation.
Natural gas can also be used as fuel for vehicles and as a major feedstock for the production of ammonia through the Haber process for use in fertiliser production.
The reports that the Lupane Gas project has found an investor would come as good news to Kwekwe-based fertiliser manufacturer, Sable Chemicals, which is considering transforming its processes so as to use gas in fertiliser production as opposed to grid electricity.
Sable, which has since remodelled its plant and slashed power consumption from about 80MW to a maximum of 10MW, says it would be an off-taker of the gas from Lupane.
The company’s chief executive officer Mr Bothwell Nyajeka recently told Business Weekly that: “As Sables we would be an off-taker to whoever would be exploiting the gas fields.
“They would (the company exploiting gas) be guaranteed that Sables would be taking the gas.”
Deputy Minister Moyo said if Sables used gas in the production of fertiliser; that would help reduce the prices.
This comes as farmers have recently been complaining that the price of fertiliser was too high that it was difficult for small-scale farmers to make a profit.
“Electricity doesn’t make fertiliser any cheap for the client. Even your miners when they buy ammonium nitrate for blasting, it’s very expensive,” said Eng Moyo.
A 50kg bag of ammonium nitrate is pegged at between $32 and $36.
Natural gas reserves were discovered in the Lupane-Lubimbi area in Matabeleland North province a couple of years ago, and many investors have been associated with the project, to no avail.
Late last year, Mines Minister Walter Chidhakwa said that Government had cobbled a $60 million package to support the exploitation of coal-bed methane gas in Lupane but not much has been heard of the investment since then.
China Africa Sunlight Energy has also failed to start exploiting the Lupane Gas since 2004 when it launched its $2,1 billion investment package.
Under the investment deal, China Africa Sunlight Energy had proposed to exploit gas wells for power generation and set up a 600MW thermal power plant.
