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Frequently Asked Questions
Frequently Asked Questions
The below sets out some basic information in respect of Botala’s proposed exploration and development activities in Botswana based on its current intentions. However, readers should be aware that, as with any work program, the work proposed to be undertaken is subject to a number of factors (some of which may be beyond the Company’s control) and the actual techniques utilised by Botala may change from the below.
include employment, especially preferential recruitment from nearby villages and use of local contractors; social interaction between employees from elsewhere and villagers; gender equality; training and skills transfer; and assistance to local villages.
These issues will be addressed in the EIA.
Botala currently employs about 70 Batswana casuals, scientists, technicians, and contractors. The employment numbers and skills-mix vary greatly with stage of development. Botala’s focus is on local employment and, where specific skills are not available locally, to develop these as work progresses.
From Botala’s exploration activities to date, the coals of interest to Botala occur at about 400 to 500m depth, typically about 200m below the Ntane Sandstone Formation. The latter contains the Ntane aquifer which is known for its good quality water on which many lease owners rely.
Cbm is found in coal seams, together with formation water which is often brackish. Coal formation water is not connected to the Ntane aquifer from which it is separated by ~200m of impermeable rocks.
When drilling to the coal, it is envisaged that the drill will insect and drill through the Ntane aquifer at ~150 to 250m depth. The drilled hole is cased-off to protect water of the Ntane aquifer prior to continuing to drill to deeper coal seams. To case-off or seal the Ntane aquifer, a steel pipe, slightly smaller in diameter than the drilled hole, is placed in the drilled hole and the gap between the outside of this pipe and the rock walls of the drilled hole is filled with cement. The cement is pressure tested to confirm that cementing successfully sealed the Ntane aquifer. This ensures that the steel pipe is firmly cemented in the drill hole and that no water can escape from the Ntane aquifer into the drill hole, and no water above or deeper in the drill hole can mix with water of the Ntane aquifer. Cementing the deeper section of the drill hole is repeated when the coal seam is reached. This prevents possible mixing of waters from the coal formation and the Ntane aquifer or any other water that may have been encountered during drilling.
Cementing and pressure testing ensures that no cbm can escape from the coal seam other than through the installed pipe which is fitted with a valve at the surface that prevents cbm escaping to the atmosphere.
Adherence to these procedures is designed to ensure that cbm exploration and production will not affect the levels and quality of water of the Ntane aquifer or in any other formation.
Natural gas from coal consists exclusively of methane which is also known as sweet gas as it has no hydrogen sulphides. Natural gas associated with oil deposits is methane with traces of other gases (ethane, propane, butane, pentane and hexane) which give it a slightly higher energy content.
Natural gas associated with oil is typically under great pressure and often flows to the surface when pressure is released by drilling into the gas formation. This is like pricking a hole into a blown-up balloon.
Cbm is under relatively low pressure and together with coal formation water, is brought to the surface under its own pressure and gentle pumping.
Natural gas from coal and oil sources is often carried in the same pipelines.
Two questions often asked are:
Is water pumped into coal to force out cbm?
Water is not pumped into coal to force out cbm. On the contrary, to stimulate cbm flow, coal seams are continuously dewatered under controlled pressure. This causes steady drying, shrinking and development of cracks from the well (drill hole) into the coals to form pathways for the flow of cbm towards the well.
How do we get the cbm to the surface?
Cbm molecules are adsorbed to coal surfaces, including the inside of small, lens-like cracks known as cleats that developed during coal formation. In most instances these cleats were subsequently filled with calcite (carbon carbonates) which traps the cbm. Drying and resultant shrinkage and cracking of the coals from the well into the coal creates pathways for the flow of cbm towards the well. This flow is often enhanced by dissolving the calcite with dilute acid to liberate the cbm in cleats near the well. Dissolving calcite, coupled with ongoing drying and shrinking, results in an ongoing pressure difference which stimulates cbm from more distant coals to flow with formation water through the cracks and cleats towards the well from where it will be pumped to the surface under controlled pressure.
Cbm bubbles freely in coal formation water flowing to ground level in Botala’s exploration wells. The following general procedures are used by Botala to enhance this flow:
- Increase the diameter, and hence exposed surface area, of the drilled cbm-containing-coal section from 6.5 to 10 inches using a special reaming tool.
- Wash the reamed surface with dilute citric acid to dissolve calcite in cleats in the vicinity of the well and establish a permeability which will be maintained and extended by ongoing dewatering and drying.
- Dewater the cbm containing coals by pumping out formation water under controlled pressure. This might take several months.
- Ongoing dewatering leads to slow and continuous drying and shrinkage of coal which enhances permeability and maintenance of a pressure difference to provide pathways for the flow of cbm from coal to the well bore, and then to the surface in formation water.
When cbm and formation water flow freely, the cbm-water mix will be collected from various wells in a central facility where cbm is separated from the water. This cbm is envisaged to be processed on-site into CNG or LNG and trucked to Serowe, or, as volumes increase, piped to the proposed Leupane Energy Hub.
The pipelines delivering cbm-water mixes to the central facility are special PVC pipes with likely diameters of ~5cm. They will be buried at a depth of ~75cm, using conventional pipelaying machinery used to lay and bury irrigation pipelines in a single operation. Soil disturbance and vegetation clearing will be confined to relatively small areas, and removal of stately or otherwise important vegetation can be avoided or kept to a minimum. The diameter of the pipeline from the cbm field to Leupane is yet to be determined, and is dependent on cbm volumes, friction, and compression of cbm. It is likely to be installed by a similar process.
Each well is expected to produce cbm for around 6 to 12 years. When a well stops producing, its pipeline is recovered for re-use.
Since each well will have a relatively modest production rate, relative to gas wells associated with oil fields, a cbm production area will consist of numerous wells. The total number of wells will be determined by flow rates and demand for cbm; but it could be ~100 to 200 (and possibly many more) vertical production wells, spaced ~300 to 400m apart over a large area. Each well looks is like a water bore and is typically drilled with a water drilling rig.
Botala is optimistic that it may not have to drill and develop expensive horizontal wells.
If handled and maintained correctly, natural gas obtained from coal or oil fields is very safe and widely used for electricity generation; industrial, commercial and domestic applications; and cooking and heating.
Since becoming a substantial gas producer and one of the world’s largest exporters of LNG, gas is widely connected for use in houses in Australia.
In Botswana, where reticulated gas is not available, bottled gas is used widely.
During exploration, trace volumes of cbm are likely to escape when drilling into cbm formations. Further cbm escape is prevented by a valve installed on the top of the well pipe. When cbm flows to the surface during temporary flow testing, it is burnt in a special flare stack.
Botala aims to keep flaring to a minimum as it wastes a valuable resource.
When developing the cbm collection system and transporting cbm via pipeline or road tankers, cbm (as CNG and LNG) will be in a closed circuit from which it should not be able to escape. Likewise, no cbm can escape from cemented and pressure tested wells fitted with a valve on the well head to prevent cbm escaping.
The gas industry is a highly regulated, engineered, monitored, and understood industry. Modern operations are highly unlikely to have escaping gas, and rare leakages are quickly identified by sophisticated monitoring, isolated by remote control, and repaired.
The cbm-water mixture will be separated into cbm and water in the central collection facility. This water is likely to be brackish. During exploration it will be collected for evaporation in ponds lined with polyvinyl to prevent seepage. During cbm production, when greater volumes of such water are produced, Botala will make this water suitable for human consumption and irrigation by removing its salts.
Some of this water might also be used by Botala to produce green hydrogen, using on-site generated solar energy.
Botala will try to prevent elephants accessing evaporation ponds by locating one or more beehives next to evaporation ponds as elephants are known to avoid bees as soon as they sense them from some distance.
This method is used effectively in Zambia where elephants from the unfenced South Luangwa National Park are attracted to crops of nearby villagers. This was found to be easier and more effective than hanging rags soaked in water containing crushed chillies around crop fields and has started a local honey industry.
CNG and especially LNG are widely used in generators and vehicles as an alternative to diesel and petrol. Engines require minor modifications and a suitable gas tank.
Hydrogen has traditionally been produced from cbm (chemical formula CH4) by processes called steam methane reforming and more recently by pyrolysis. The latter splits cbm into hydrogen (H2) and solid carbon (C), a process that requires electricity which Botala would produce using its solar panels, to produce “green” hydrogen with minimal to zero carbon dioxide emissions. The resultant solid carbon, known as Black Carbon, could be converted to graphene and graphite, two valuable new-age products. Botala is closely following research to produce hydrogen and commercialise graphene and graphite production.
Coal provides reliable and essential base load electricity and will probably continue to do so for many years. Coal-fired power stations cannot be turned on and off in response to solar variations, but cbm turbines and diesel engines can. Thus Botala believes that cbm, when combined with solar in hybrids, could become a source of reliable electricity in Botswana and many other countries.
Botala’s proposed hybrids are intended to complement Botswana’s coal-fired electricity generation.
Cbm belongs to the Government of Botswana and hence to Batswana.
Botala has the right to enter land covered by its Prospecting Licences to explore and evaluate cbm as outlined in an Environmental Management Plan (EMP) and an Environmental Impact Assessment (EIA) approved by the Department of Environmental Affairs (DEA). When and if Botala converts its Prospecting Licenses to Mining Licences, it will obtain the right to extract cbm, on behalf of the Government of Botswana which receives a royalty, subject to procedures to be outlined in an EMP and EIA which Loci Environmental is preparing for approval by the DEA (refer to Section 3 and Annexure C of the Prospectus for further details in respect of Botala’s Serowe CBM Project).
The land on which these Prospecting Licences are located is administered by the Ngwato Land Board on behalf of the Government of Botswana which is the ultimate owner of the land and underlying minerals, including cbm. In many instances the Ngwato Land Board has granted 50-year leases over this land to ranchers with the option of renewal for a further 50 years.
Botala is determined to work closely with ranchers to ensure that potential land-use conflicts are avoided and that development of cbm is undertaken in a manner that is mutually beneficial. Botala is evaluating opportunities to cooperate with Sandvelt ranchers and is communicating with several ranchers and the Sandvelt Ranchers Association. The use of cbm-produced water for irrigation may provide a beneficial opportunity to the regional cattle industry
Botala’s approach is to avoid conflict and resolve disputes amicably.
Should Botala’s operation adversely impact a landowner’s property, such as evidence of a damaged fence, gate or similar, this will be repaired and if appropriate, compensation will be negotiated and paid by Botala.
In instances of land-use conflict, resolution of the conflict will be discussed with the relevant landowner and the Land Board. In the event of a dispute, the services of an independent arbitrator may be sought.
Electricity generated from cbm may potentially reduce carbon dioxide emissions by about 50% per unit of electricity relative to coal. This could increase to a reduction of 75% in hybrids, depending on the ratio of solar to cbm generated electricity, and emit no particulates.
Use of cbm may contribute to reducing carbon dioxide emissions; achievement of Botswana’s carbon dioxide emission goals; and earn carbon credits.
Natural gas has no odour. Gas companies add a harmless chemical, mercaptan, to gas to give it a distinctive rotten egg smell to detect leaks and open gas bottles.
Botala wants to make a positive contribution to Batswana by attracting Batswana shareholders, management, and partners. Botala is seeking to establish relationships with Batswana companies, partners and investors interested in becoming involved in Botala or in projects Botala might attract to the proposed Leupane Industrial Park and elsewhere.
This document does not constitute financial product advice or take into account your investment objectives, taxation situation, financial situation or needs. This document consists purely of factual information and does not involve or imply a recommendation of a statement of opinion in respect of whether to buy, sell or hold a financial product. All securities involve risks which include (among others) the risk of adverse or unanticipated market, financial or political developments. An investment in Botala is considered to be speculative in nature. Before making any investment decision in connection with any acquisition of securities, investors should consult their own legal, tax and/or financial advisers in relation to the information in, and action taken on the basis of, this document.
This information is correct as of 18/05/2023.