Thursday, May 23, 2024

Botswana Oil steadfast on coal to liquids multi-billion project

State owned national oil company, Botswana Oil has indicated that plans are underway to secure a partner to undertake a multi-billion coal to liquids project in the country in 2025.

The Coal to Liquids (CTL) project, better known as Ikaegeng XTL Project (the Project) is a Public Private Partnership (PPP) project for the development of a CTL Facility and a CTL business in Botswana, producing petroleum products primarily for the local market, and other downstream products.

The Ministry of Minerals and Energy (MME) is the Sponsoring Institution for the Project, and is represented on the Project by the Project Principal from MME. Botswana Oil Limited (BOL)  is a Government owned company formed  to ensure security of supply of petroleum products.

The Project will be developed as a PPP project using the Design, Build, Finance, Operate, Maintain and Transfer (DBFOMT) PPP model.

Botswana Oil Chief Executive Officer Meshack Tshekedi said a Public Private Partnership (PPP) feasibility Study was conducted, based on the requirements of the Public Private Partnership Policy and Implementation Framework (PPPPIF) guidelines which produced a PPP feasibility Study Report (FSR) which included the development of a Shadow Bid, which formed the basis for the business case for the Project.

“The timeline of the project begun from 2017 with project scoping and PPP Feasibility study and is now currently at the RFP stage with Project construction expected from January 2025 for completion in June 2028. The commissioning of the Facility is expected from July 2028,” said Tshekedi.

Tshekedi also said: “The FSR indicated that the Project had potential and was worth pursuing further. This FSR was submitted to the PPP Unit and approved in July 2020 paving way for the development of a Request For Proposal (RFP) to procure a Private Sector Partner for the Project”.

He said since 2017, the Project has moved through a project structuring and a pre-feasibility study phase adding that submissions were made to the PPP Unit, under the Ministry of Finance for the Project to be developed as a PPP project.

He highlighted that Botswana Oil is currently focused on engaging various stakeholders on  how the project can mitigate environmental and climate change issues, which include Carbon Capture, Usage and Storage (CCUS).

The CEO further said they are exploring various coal supply sources including discussions with Morupule Coal Mine for the supply of coal to the project, development of requirements for the project, scoping the project with inclusion of downstream and by products and finalising of the request for proposal for release to the market. 

“The Project is a technologically complex megaproject to be executed on a multiyear schedule and is estimated at more than P60bn,” added Tshekedi.

Tshekedi also said Botswana Oil conducted local and international roadshows with a view to promote the project and there has been interest shown both by local and international potential bidders to develop the facility in Botswana.

“This is a project of national importance and regional significance, which will have several categorised benefits such as fuel security and employment, citizen job creation supporting higher disposable income, citizens participation in fuel distribution, security, catering, maintenance and other related industries,” says Tshekedi. He also said it will significantly change the balance of payments in the country.

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