Botala Energy has secured an increased investment from the Botswana government, advancing its coalbed methane and liquefied natural gas development plans. The government, via Minerals Development Company Botswana, will invest 35 million pula for a 15% stake in the Serowe CBM project and a 1% royalty on future LNG production. This investment is intended to fast-track gas flow testing and fund a bankable feasibility study for an LNG development pathway targeting 3.5 petajoules per year.

Project Status and Key Agreements

The Serowe CBM project is fully owned by Botala Energy and has received necessary environmental and mining licenses. A significant milestone is a binding letter of intent with SCAW South Africa for an LNG offtake agreement. The initial agreement is for 3.5 PJ per annum, with an option to expand to 4.7 PJ, and first LNG supply is targeted for 2027-2028. SCAW will also collaborate on downstream infrastructure and participate in Phase 2 of the feasibility study for a modular LNG facility.

Development Phases and Financial Projections

The project is structured in four phases:

1. Phase 1 involves flow testing five wells over 90 days.
2. Phase 2 will add four new wells and a Galileo mini-LNG unit.
3. Phases 3 and 4 will scale commercial production and LNG processing, increasing total wells to 36 and 108, respectively.

Financial estimates project potential annual revenues of $2.65 million after Phase 2, $10.6 million after Phase 3, and $37.1 million after Phase 4.

Forward Plan and Context

Immediate plans include upgrading resources to reserves and increasing well flows via stimulation through the first half of 2026. The company aims to secure partner funding for LNG units in early 2026, ahead of a final investment decision on the Serowe project planned for the second half of 2026. The project's total CBM resource estimate was revised upward by over 40% in July last year to approximately 450 billion cubic feet. This development follows over two decades of attempts to commercialise CBM in Botswana, historically hindered by a lack of major domestic markets and reliance on coal-fired power.