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Tlou Energy rises following invite to bid for major power project in Botswana (TLOU)

Gas-to-power business Tlou Energy (LSE:TLOU) bounced 8.4pc to 6.3p today after telling investors that it will bid for the development of key coal bed methane (CBM) power plants in Botswana. Alongside local firm Sekaname, Tlou has been invited to re-tender for the development of a maximum of 100MW of CBM-fuelled Pilot Power Plants in the country as an independent power producer. 

A compulsory pre-tender meeting with representatives of the procuring department will be held at the Botswana Minister of Mineral Resources, Green technology, and Energy Security on 9 August. Tlou sent an initial request for proposal for the project to Botswana’s ministry in September 2017, outlining a staged development commencing with up to 10MW of generation. It also outlined project feasibility, proposed field development, installation of power generation facilities, and supply of power into the grid in Botswana.

Tlou is focused on delivering gas-to-power solutions using CBM gas in Botswana and southern Africa to address a major power shortage in the region that forces it to rely on expensive imported power and diesel generation. CBM is an unconventional form of natural gas trapped in the carbon structure of coal seams. It is extracted by vertical and horizontal drilling then pumping out naturally-occurring water to reduce underground pressure so gas can be collected.

Tlou is the 100pc owner of the Lesedi CBM project, the most advanced gas project in Botswana, containing contingent gas resources of c.3.2 trillion cubic feet and independently certified gas reserves of c.261 billion cubic feet. Once it has fully implemented Lesedi, the business plans to evaluate longer-term prospects for the delivery of electricity generated from CBM in Botswana to neighbouring countries.

In a statement today, Tlou said: ‘Being the most advanced CBM project in Botswana, with gas reserves in place, having environmental approval for upstream development and a mining licence secured allowing the company to commence development operations, the company is very pleased to receive the re-tender document and will now undertake a compressive review of the terms therein.’

 Author: Daniel Flynn

Disclosure: The author of this piece does not own shares in the company covered in this article.

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