The company’s founder and managing director Tony Gilby has told ICN sister publication Energy News the company had just signed a deal for the delivery of a 300 megawatt gas-fired power station in the region.

The non-binding framework agreement with multinational General Electric and Australian start-up IK Holdings relates to the sharing of infrastructure for the supply of gas by Tlou to Botswana Power’s existing 90MW Orapa generator and a proposed co-located 300MW gas-fired power project to be developed by IK and GE.

If the project goes to fruition it would be a major win for the power-hungry African nation, and a major boost for the fortunes of Botswana’s emerging mining sector.

GE is well known globally for its power generation investments and its role in almost every LNG project in production or under development in Australia, while IK was established by a group of power generation professionals with the primary purpose of developing new sources of gas-fired power in Botswana.

IK has the only gas-fuelled solution that has been prequalified by the Botswana Ministry of Mines, Energy and Water Resources.

It will now be a case of all hands on deck for Tlou, given the agreement will expire on November 30.

Gilby knows that breaking a new petroleum province with a new fuel isn’t an undertaking for the faint-hearted, but that’s what Tlou has been doing in Botswana with CSG since 2009.

If things go the company’s way the African nation could start becoming a significant supplier of gas and energy to southern African from its project, which is being derisked by the Lesedi and Selemo pilots.

There are two horizontal wells that are being dewatered and are producing some gas from coals between 300-700m.

In Selemo gas flowed peaked on test at 400,000 cubic feet per day late last year, with an average 200,000cfpd.

Gilby was one of the main players behind Queensland CSG pioneer Sunshine Gas, which was sold to Queensland Gas Company for $830 million in 2008

He’s spent the past few years early trying to replicate that success with Tlou in Africa and Comet Ridge in New Zealand and Queensland’s Galilee Basin, and Botswana has been the horse to bet on, and Tlou is now the most advanced gas company operating in Botswana.

Botswana is a much easier jurisdiction to work than Queensland, he told Energy News.

“It is a very supportive government and the regulations are similar to Queensland 10 years ago, when it was all about development within reasonable constraints rather than constraints for constraint purposes alone,” he said.

“Queensland is mired in all kinds of regulatory burdens, red and green tape, while Botswana does everything by world’s best standards and the degree of bureaucracy involved in decision making and planning is much, much less than Queensland.

“It is just easier to work in, and we can drill similar wells for one-half, one-third or even one-quarter of the costs in Queensland because of the lack of regulatory impost.”

Tlou recently posted its first 1C reserves and upgraded its 2C and 3C numbers, and is now looking to develop markets for the gas that will allow it to book its first reserves.

Its Lesedi project has its first 1C resources, and has been increased 2C and 3C contingent resources by 57% and 42% respectively since the company listed in April 2013.

In-place resources are now 7.6 billion cubic feet (1C), 367.8Bcf (2C) and 5347.5Bcf (3C) with recoverable potential of 4.9Bcf (1C), 239.1Bcf (2C) or 3295.5Bcf (3C).

Gilby says Tlou’s early-mover advantage meant it has found the best coal development in the nation.

“We have found the hotspot, if you will, and that is where we will drill our additional pilot wells to get our critical gas flows, which will get us into the market,” he said.

Tlou believes the development of CSG in Botswana could take off as quickly as it did in Queensland.

The key difference is that whereas Queensland has coal reserves in different formations underlying much of the state the African nation’s prospective area is primarily where Tlou is based, because while the Karoo-Kalahari Basin underlies 70% of Botswana the coals are only suitable for CSG production in areas such as the Mmashoro Low.

“As the industry gets up and running the lesser areas will come to the fore. It will never be as big as Queensland, but it will be of an appreciable size in relation to Queensland. It is very much a large commercial opportunity for the industry,” Gilby said.

And he calls the market in and around Botswana as “essentially unlimited”

“They don’t have any peaking power at all, other than via diesel, and diesel is very expensive to deliver inland, so the only source of non-coal electricity they have is bottled LPG, which is also imported, and of course the bulk of the power is imported from Eskom in South Africa, which is also short,” he said.

“It is virtually an unlimited market, so what we will do when we start up the pilot is take our flare gas, compress it and sell it as CNG.

“We’ll truck it to save on infrastructure and we’ll get it to market with a small power generation plant there, and that will expand commensurately with production, leading eventually to the delivery of gas to the Orapa power station.”

Tlou has a framework gas sales agreement for the supply of gas from its two pilot projects with South African-based CNG Holdings to allow for the sale of gas to industrial customers and fleet vehicles, via compressed natural gas and has had discussions with the operators of Orapa.

A framework agreement covers a proposed gas to power proof of concept plant that will supply local power generation from pilot well ramp up gas, including supply of power to a nearby villages and excess power to the local grid, a modest 30MW proposal requiring just two petajoules per annum, although the GE-IKH deal will require 10 timers that.

Gilby says Tlou’s project is easy to understand, and simple, is located in the best location in the region.

All the company needs to do it prove its flow rates are commercial and repeatable, define the best completion technique, and then it can follow the Qld model of scaling up the CSG field to meet demand.

Besides Botswana, South Africa, Namibia, Zambia and Zimbabwe are potential gas buyers.