Tlou makes solid progress at Lesedi in first half

8th Mar 2024 10:22

(Sharecast News) - Tlou Energy reported significant progress towards its goal of introducing gas-fired power into the Botswana grid later this year in its interim results on Friday.

The AIM-traded firm, which is currently pre-revenue, reported the ongoing flaring of gas at the Lesedi production wells as dewatering progressed, as well as the completion of a 100 kilometre, 66kV transmission line linking Tlou's Lesedi project directly to Botswana's power grid and the Southern African Power Pool, and the successful connection to the Serowe substation, eliminating Lesedi's isolation from the primary Botswana electricity market.

Additionally, it said the the Lesedi substation, crucial for connecting Tlou's power generators to the transmission line, was about 38% complete and making steady progress.

Tlou said the flagship Lesedi Power Project, located at its operations base in central Botswana, was set to become a 10MW power generation facility.

The company was planning to start electricity sales into the power grid later this year, with subsequent rapid expansion.

Currently, Tlou said it was flowing gas and had established a fully operational base about 100 kilometres west of Serowe, on its own 4,000-hectare property.

The recently-completed 100 kilometre, 66kV power line allowed direct access to the regional power grid.

Remaining tasks before the start of power sales included finalising the Lesedi substation, generator installation, completion of the short gas gathering line, energising the power line, and initiating the sale of electricity.

Additionally, minor finishing works on the transmission line and the installation of switchgear at Serowe were scheduled for completion before the start of power generation.

Tlou said it had obtained all necessary approvals, including environmental assessments, production and power generation licences, and a power purchase agreement.

The electricity would be generated using gas from Tlou's certified gas resource, with significant reserves confirmed by independent experts.

Tlou holds exploration permits covering around 9,000 square kilometres, including a production licence of 900 square kilometres, and is currently focussed on the Lower Morupule play.

The Botswana government was continuing to support Tlou's endeavours, as Tlou also aimed to expand its market reach by potentially selling electricity regionally via the Southern African Power Pool.

In recent developments, Tlou raised $1.14m through an entitlement offer, and was currently in discussions with strategic parties to secure the remaining funds required for project completion.

"The company has made excellent progress over recent months and we are getting very close to first revenue," said managing director Tony Gilby.

"Having direct access to the power grid opens up our gas field to a huge market.

"It has taken hard work and significant investment over many years to get to this point and we look forward to delivering power and earning first revenue for the company as soon as possible."

At 0917 GMT, shares in Tlou Energy were up 2.33% at 2.2p.

Reporting by Josh White for Sharecast.com.