For the past few decades, the African energy market has been growing at a steady rate, with a multitude of African nations finally developing investment-welcoming environments for outside interests. Botswana is the latest African nation to develop its latest energy project, a coal-bed methane development that, following years of stagnation, is finally reaching a Final Investment Decision this year.
Botswana’s coal-dominated energy market is shifting this year
For the vast majority of the past decade or so, Botswana’s energy market has mostly been dominated by coal. The nation has experienced a significant lack of investments in domestic production, with the vast majority of coal used in Botswana coming from imports.
The Morupule coal-fired plant has stood as the backbone of the nation’s energy sector; however, as the new year has hit the world like a ton of bricks, a new future for the African energy market is emerging that will see nations like Botswana developing new and pioneering energy projects that will drastically reshape the nation’s energy market.
Botala Energy moves forward with its latest coal-bed methane development
Botala Energy has secured a substantial investment from the government, which will serve the company’s coal-bed methane and liquefied natural gas development plans. The government-led Minerals Development Company Botswana will invest upwards of $3.6 million in the Serowe CBM project for a 15% stake and 1% royalty on future LNG production.
This significant investment by the government aims to accelerate gas flow testing and fund a bankable feasibility study, which will develop a long-term pathway for LNG production, targeting 3.5 petajoules annually. Botala Energy owns all the rights for the Serowe CBM project and has received all the required mining and environmental licenses.
Botala has secured significant offtake deals for Serowe CBM LNG production
Botala has announced that the company has secured an offtake deal for the LNG produced at the Serowe CBM development with SCAW South Africa. The initial offtake agreement is 3.5 PJ per annum, with an option to expand the offtake deal to 4.7 PJ if everything goes according to plan.
Botala anticipates the first LNG to flow and be delivered in 2027, and is targeting a final investment decision on the project sometime this year. SCAW South Africa will also collaborate with Botala on Phase 2 of the aforementioned feasibility study for a modular LNG facility.
The Serowe CBM project will be developed in three distinct phases, namely:
- Phase 1 will see flow testing of five wells over 90 days.
- Phase 2 for the Serowe project involves adding four new wells and a Galileo mini-LNG unit.
- Phases 3 and 4 will consist of scaling up commercial production and increasing the total number of wells overall.
Short-term plans involve upgrading resources to reserves and increasing flow from the multitude of wells over the first half of 2026. Botala aims to secure partner funding for LNG units early this year and is targeting a final investment decision sometime in the second half of 2026.
With the African Energy Chamber forecasting an uptick in upstream production across the continent, projects like the Serowe CBM development will play a vital role in advancing Africa’s role on the global energy stage.
The latest CBM project in Botswana has been a long time coming
It has taken the Botswanan Government nearly two decades to develop the framework to advance the CBM project and reach an actual plan to develop the coal-bed methane venture. With market data revealing that African frontier basins are expected to attract outside investments this year, the reality of the current situation across the energy market is that African nations will see their roles shifting as new and pioneering projects come online over the coming years.
