unprecedented interest in sa’s unconventional

Unprecedented interest in SA’s unconventional gas resources.

By: Jean McKenzie
3rd November 2011

Foreign and local interest in South Africa’s unconventional gas resources has been “unprecedented” and continues to increase, Petroleum Agency South Africa (Pasa) CEO Mthozami Xiphu said on Thursday.

The country’s unconventional resources of interest included not only the much publicised shale gas deposits of the Karoo, but also coal-bed methane and biogenic gas, he said at the 18th Oil Africa Week in Cape Town.

Xiphu said the most exciting development of late was the production licence application by Molopo Energy for the Virginia area, which could be granted “in the next week or two”. Should the licence be approved, Molopo Energy would hold South Africa’s first onshore gas production rights.

He added that Molopo Energy had negotiated a gas sale agreement with Novo Energy for an initial sale of approximately 600 000 cf/d to be converted to compressed natural gas for use in vehicles.

Another development regarding the potential Molopo Energy production licence was that, while the source of the gas was originally thought to be coal-bed methane, it was now believed to be biogenic gas generated by microbes in the underlying Witwatersrand basin. “While this gas has long been flagged as a mining hazard in South Africa’s gold mines it may in fact prove to become a renewable hydrocarbon energy source in years to come,” stated Xiphu.

Conventional offshore gas resources in the Ibhubesi gas plane off South Africa’s West Coast, which has “multi tcf [trillion cubic feet] potential”, would also hopefully see the initiation of production in the near future. “The success of this venture will go a long way towards removing the barriers to development of all gas deposits in our country and show the way for the development and monetisation of all further gas discoveries off this coast.”

While Xiphu said there is great interest in shale gas resources in the Karoo from leading oil and gas companies such as Shell, Sasol, Sungu Sungu, Chesapeak, Statoil, Bundu and Falcon, he would only say that the licensing process for the area was “currently on hold”.
He did not elaborate on any developments in the steps being carried out by Pasa or the South African government in assessing the licences and the risks of the hydraulic fracturing process, which would be used to access the shale gas resources.

Xiphu’s statements came after protesters gathered near the venue of the Africa Oil Week conference at the V&A Waterfront to demonstrate against proposed hydraulic fracturing, or fracking, in the ecologically sensitive Karoo area.

The protest also coincided with a corporate showcase presentation, sponsored by Shell, on developments in global best practice of shale gas mining, being presented by independent energy consultant Dean Malouta. The protest dispersed by mid-morning.


http://m.engineeringnews.co.za/article/unprecedented-interest-in-sas-unconventional-gas-resources-2011-11-03