Business

Afro Energy taps gas riches

2015-11-22 15:01

Farmers in Amersfoort in Mpumalanga have known for years that there is gas ­under their soil. If you sink a borehole in some places, methane gas instead of water comes to the surface.

Afro Energy has now finally brought the technology and know-how to South Africa to extract this natural gas. The company recently showed the media its test boreholes on the Brakfontein farm outside Amersfoort.

All that is visible on the ground is a pump and a steel pipe that sticks out of the grass like a thick straw. There is a hissing sound when the borehole is opened. When the gas is set alight, an enormous roaring flame burns at the top of the pipe. The heat can be felt metres away.

After years of regulatory hoops, Afro Energy has also obtained a permit for bulk testing, which allows it to sell the gas from two licenced areas in Amersfoort and Volksrust.

Afro Energy is a joint venture between South African company Badimo Gas and Kinetiko ­Energy, which is listed in Australia.

Donald Ncube, chairperson of Badimo, said it took pioneering work to obtain the exploration rights and the current permit. He said the regulations of Petroleum Agency SA had no provisions for the mining of natural gas.

“There wasn’t even a form we could fill in – they had to customise another form.”

Legislation after 1994 sees gas as a mineral for which rights can be obtained. However, the land Afro Energy wants to mine for gas is still owned by farmers.

“To get there, you first have to go to the farmer. At the first meeting we had with interested ­parties, the farmers arrived armed to the teeth. We realised we would have to communicate ­better,” Ncube said.

Ncube himself went to talk to the farmers, had coffee and made peace – and then a farmer ­unexpectedly encountered a Scotsman and an Australian in his mealie field who wanted to mine for gas.

Ncube said the good relationship he and the company had today with the farmers in the area was vital.

South Africa didn’t have local experts to carry out the geological tests necessary to ascertain ­exactly how much gas is hidden in the veld around Amersfoort. Ncube got Paul Tromp, an American geologist who specialises in coal bed methane gas, to come have a look.

Since the 1970s, there has been large-scale mining of this type of gas in the US states of ­Montana and Wyoming.

Tromp sank seven test boreholes at Amersfoort and an eighth at Volksrust. The gas found at ­Amersfoort is almost pure (98%) methane gas and with these holes nicknamed The Beast and Godzilla, it’s clear that these test results are very promising.

According to tests that were done on boreholes in 2012, there is a 50% chance that there could be about 2 395 billion cubic feet of gas in the ­licenced areas in Amersfoort and Volksrust. There is, however, a 90% chance that it contains at least 1 259 billion cubic feet of gas.

Tromp said these numbers were probably much higher and he was being updated by a ­contractor as part of prudence study.

“Mosgas [PetroSA] will build a pipeline to ­anywhere in South Africa if that place has 1 000 billion cubic feet of gas,” Tromp said.

The particular geology of Mpumalanga also means that Afro Energy will be able to drill for gas faster and cheaper than the Americans.

Methane gas is released gradually when plant material deep underground is turned into coal over thousands of years. The gas is released as the plant material changes. Erosion eventually brings the gas closer to the surface.

However, in Mpumalanga, methane gas is not only found in the coal layers underneath the ground, but also in layers of sandstone. This is because there is room for gas to seep in between the particles that form sandstone. However, the gas cannot penetrate the hard layer of ironstone (dolerite) that is found closer to the soil surface. The methane gas is therefore trapped in ­compartments that are formed by the layers of ironstone.

Sandstone not only makes the drilling process ­easier, it also means that a borehole delivers gas immediately. When the gas can only be extracted from underground coal layers, it can take several months before a borehole starts delivering gas.

Afro Energy is expecting every borehole to ­initially deliver about 250 gigajoules of gas a day. This quantity will decrease gradually and the ­estimated economic life cycle of a borehole is 10 years. The current market price for natural gas is about $10 (R139.10) per gigajoule.

According to Tromp, one gigajoule of natural gas releases roughly the same amount of energy as 26 litres of diesel. This means that every ­borehole, at the beginning of its life cycle, will deliver the equivalent of almost 6 500 litres of diesel a day.

Afro Energy’s current permit allows it to sell 1 million gigajoules of natural gas over a two-year period while the process of obtaining a full ­production licence is continuing. The company plans to initially sell its gas to industries, but there are many possible uses for methane gas.

According to Afro Energy, there are already more than 23 million vehicles worldwide that run on natural gas, and it can also be used to generate electricity.

Gas turbines can be particularly useful to ­generate additional electricity during peak times when people use more electricity. Methane gas can also be added to the coal that is burnt at coal power plants, making it possible to then use a lower grade of coal.

November 10 2019