NuEnergy Gas has signed an exclusive agreement with a Mozambican company to explore and develop coalbed methane (CBM). Exploration activities will be undertaken in the Tete Province, the Australia-based company added.
According to NuEnergy Gas, the unnamed local player already has an exclusive prospecting licence in Malawi and two operating agreements with a Tanzanian coal producer, as well as two exploration applications in Tanzania along the southern border area with Mozambique.
NuEnergy Gas will have the option to evaluate other prospective regions in Mozambique for unconventional gas, it added.
The Tete province in Mozambique is the world’s 5th largest coal reserve. Major coal producers in this region, including Vale and Rio Tinto, are currently developing substantial metallurgical coal reserves.
CBM and Mozambique
In a statement, NuEnergy said that for Mozambique, CBM will provide the country with an onshore resource with options for supply to LNG plants and to inland gas-fired power plants capable of generating electricity for towns and villages.
The unconventional gas could also supply small-scale CNG plants for compression and use as transportation fuel. The major cost of freight in Africa is fuel for road transportation. The current cost of road haulage ranges between US$ 0.09 and US$ 0.12/t per km, 80% of which is fuel. NuEnergy said: “As shown in the US, it is possible to achieve cost savings of 30% by using compressed gas. This is a significant benefit to both coal mine haulage as well as bulk haulage operators.”
NuEnergy has access to a specialised drilling rig (Hanjin 45) for CBM, which the company said would be mobilised in Mozambique over the course of 2014.(World Coal)