Gas extraction in Lupane to begin in 2019

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Masimba Gomo

One of the three firms which were granted a coal-bed methane concession by Government in Lupane, Matabeleland North Province, Discovery Investments, has said it will start drilling production wells in February 2019 marking the beginning of commercial gas extraction.

Discovery Investments which owns a concession in the Siwale area in Mzola, Lupane has since completed exploration and was issued with an Environmental Impact Assessment certificate.

Discovery Investments Executive Chairman, Thabani Hove said financial closure for the project was almost complete without disclosing the amounts involved.

“The project is progressing well, we should start drilling the production wells in February 2019 and this will be for the actual gas production,” Hove said.

“Unfortunately we cannot disclose the amount for confidentiality reasons.”

In January 2018, the company announced that it required about $700 million to start commercial gas production.

Hove urged Government to review some fees paid by miners.

“We are hoping that Government can quickly resolve the issue of exorbitant ground rentals which it inherited from the previous government so as to attract huge investment,” he said.

“Charging ground rentals during exploration is unfortunately an investor deterrent and this is unique only to Zimbabwe. The CBM (coal bed methane) Industry needs hundreds of millions of dollars in investment and to attract such huge investments we need to come up with incentives”

He said government should expedite the crafting of National Gas Policy to encourage growth of the sector.

“We need a National Gas Policy. A National Gas Policy is very fundamental for any serious investors and for as long as we do not have one we will not be considered to be serious about developing the gas industry in Zimbabwe,” he said.

According to the company its gas reserves could be exploited over a period of 50 years.

The appetite for gas consumption is growing in the country with the Zimbabwe Energy Regulatory Authority indicating that the country has recorded a significant rise in household consumption of liquefied petroleum gas in recent years. Through exploitation of CBM gas, analysts contend Zimbabwe could turn from a net importer of fertilizers to a net exporter, which would help preserve hard currency.

Apart from heating, power generation and petrochemicals production, CMB gas is also used to produce hydrogen, one of the major raw materials in the manufacturing of fertilizer.