Published by the government of Zimbabwe
10 October 2008
Harare — The implementation of the Lupane Methane Gas Project has been stalled by the failure of a joint venture between the Industrial Development Corporation and Newcyc of India.
In his statement accompanying IDC's financial report for 2007, general manager, Mr Mike Ndudzo said Newcyc has failed to supply a drilling rig for the gas reserve drilling stage.
IDC and Newcyc signed a Memorandum of Understanding in October 2006 that has yet to materialise.
The Lupane Gas project was accorded National Project status last year in a development that was expected to pave way for the release of funds for feasibility studies.
A total of US$12 million was required for the mini gas field phase to determine the extent of the reserves.
The IDC had in the past applied for gas concessions but was worried that there was still no progress by Government in putting in place the policy and regulatory frameworks on coal bed methane or hydrocarbons.
In response to questions from Parliamentarians during a meeting, Reserve Bank Governor Dr Gideon Gono indicated that more than US$200 million was required to commence operations at the project. He said there were two stages that needed to be undertaken before taping methane. These were exploration and checking on the amount of resource and quality of gas underground.
At least two holes were reported to have been drilled so far but these were said to be insufficient to determine the viability of the project.
The IDC and the National Economic Development Priority Programme taskforce on foreign currency mobilisation has been on the drive to find suitable investors to partner it in the project.
However, the Corporation and the taskforce are facing difficulties in this regard as investors are afraid of engaging in the feasibility studies fearing losses in the event that there is insufficient gas underground.
An estimated 665 000 cubic metres of methane gas deposits are believed to be underground in Lupane.
The Lupane deposits are believed to be the largest in the Southern African Development Community (Sadc) and when fully operational the project is expected to create employment for thousands of people while enabling the country to meet its energy requirements.
The project was expected to boost electricity supplies, fertilizer and plastic industries.
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