Midlands Correspondent
THE absence of an investor to exploit coal bed methane (CBM) gas reserves in Lupane has stalled the country’s sole ammonium nitrate (AN) fertiliser producer, Sable Chemicals, from using new technology to produce fertiliser. Last year, the government completed exploration of gas reserves in the Lupane-Binga area estimated at over 23 billion cubic feet but since then there has been no investor who has expressed interest in exploiting the reserves.
Sable is banking on the gas reserves to introduce a new technology based on CBM for the production of ammonia, a key component in the manufacture of AN fertiliser after the government ordered the Kwekwe-based firm to shut its electrolysis plant, which was consuming over 30 percent of the country’s power requirements.
Jack Murehwa, Sable’s chief executive officer, told Chronicle Business that raising risk capital for concept proving and the capital for development of the CBM wells has been the major hindrance to the exploitation of the gas reserves.
He said: “The concept proving and development of the gas fields will lead to the production of Coal Bed Methane (CBM), which will be potentially used for many projects like power generation, gas to liquid, fuel gas and fertiliser feedstock among others. Once the CBM has been availed, Sable will have an off-take arrangement with the developers and be one of the users of the gas in the Zimbabwe Fertiliser Project”.
Murehwa said while Sable has had discussions with potential gas fields developers, progress has been very slow in this area due to various reasons that include raising risk capital for concept proving and the capital for development of the CBM wells.
He said the company was still engaging potential developers of the CBM fields with the hope that development of the CBM Fields would commence. The Kwekwe-based fertiliser company intends to use CBM from Lupane and a feasibility study has successfully been concluded to construct a pipeline to carry the gas from Lupane to Sable (290km).
The construction of the pipeline will only commence once an off-take agreement has been signed with a CBM Fields developer. Murehwa said Sable had engaged potential financiers for the project, which will take about four years to commission from date of construction.
“Discussions with potential financiers of the project have been held and, in principle, the financiers are keen on the project. However, progress of discussions with the financiers is going to be dependent on Sable having an off-take agreement with an investor who will be progressing to produce the CBM in Lupane, ready for pumping to Sable,” he said.
Murehwa could not divulge the cost of the project saying final figures would only be available “during the detailed engineering design of the project”. However, CBM plants elsewhere have cost an average of $600 million. The plant capacity of the fertiliser project is designed to meet Zimbabwe’s top dressing requirements beyond 2025.