CIC Ventures Into Gas Production

Tuesday, October 16, 2007; Posted: 11:28 AM

Francistown, Oct 16, 2007 (The Voice/All Africa Global Media via COMTEX) -- SSL | charts | news | PowerRating -- CIC Energy is conducting a feasibility study into the construction of a coal gasification plant in Botswana. The plant, if it were to be constructed, could produce about 80 000 bbl per day. This feasibility study poses threats to Sasol, which may soon have a regional competitor in synthetic fuels in the near future.

CIC Energy, which is developing the Mmamabula Energy Project 50 km north of the South African border, in Botswana, will be an integrated power station and coal mine, the first phase of which is expected to deliver 2 400 MW by 2012. Pieter du Toit, CIC Energy's Vice President for Coal To Liquids (CTL) and a former Sasol employee, says the idea to do something more with the vast coal reserves the company owns has been in development for months.

The Mmamabula coal fields are expected to yield at least 2,2bn t of coal, just over half of which will be used to feed Mmamabula, which ultimately is planned to produce at least 4 800 MW of electricity for 40 years. This will leave the company with more than 1bn t of coal. This surplus is being considered as a feedstock for a CTL plant. Du Toit said CIC Energy is in discussion with an undisclosed energy major which licenses gasification technology to study how the Mmamabula coal reacts to its licensed processes. CIC Energy has also commissioned a London-based energy research group to do a comprehensive study of what products would be best suited to the markets of Southern Africa. It is also exploring which products may best be exported.

He said anything from methanol and urea to liquid petroleum gas is being considered for export. Once the study is completed, CIC Energy will be better placed to decide what sort of plant it will build. Dov Girnun, CIC Energy's Vice President for project development, revealed that there have been initial discussions with the Botswana government about the construction of a large CTL plant.

Du Toit said the costs Sasol expects to incur with its planned Mafutha plant which is between US$6bn and $8bn, are in line with the costs CIC Energy may incur. Girnun explained that the relationship CIC Energy has with the Botswana government is "brilliant", with company executives enjoying regular access to the country's top administrators.

Given the huge and growing demand for liquid fuels in South Africa, CIC Energy is optimistic about the future of the project. Du Toit said by mid-2009 the bankable feasibility study will be completed and the company could be in a position to begin construction. The engineering, procurement and construction phase would take at least four years, and the ramp-up and commissioning would take another year to

18 months. Girnun says the company is under no illusion about the complexity of a project of this scale and will look to develop the plant in partnership with an established technology and energy partner.