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Natural gas is a source of cleaner and more cost effective energy that is driving the economies of Russia, Qatar, America, Iran, Saudi Arabia, China, Norway and The Netherlands among others.

It is a multi-trillion dollar global industry that is, however, still developing in much of Southern Africa.

Natural gas occurs mainly as coal bed methane which Zimbabwe potentially has in abundance in Matabeleland North, the Zambezi Valley and the south-east lowveld.  The resource was discovered in the country in the early 1990s and exploration was being done in those three zones.

However, most of the explorative activity is now concentrated in the Lupane and Hwange sector of Matabeleland North.  Even then the exploration has been blighted by lack of funding.  This is unfortunate because the country needs to explore more widely and deeply to be able to accurately quantify the available resource for investors to then decide whether to put their money into extraction and development of a downstream industry.

In many countries that have monetised their gas reserves, exploration is driven by funding from global companies or the private sector.  In our country, because of the illegal sanctions, the Government has, here and there, had to put its own money into that area.

Only one company appears to have concluded exploration. Unable to attract investor interest to commercialise the resource, Discovery Investments is only conducting production testing at its wells in Matabeleland North.

We reported yesterday that the Government had secured $63 million from Sakunda Energy to explore for natural gas in the Lupane area.

On Friday Mines and Mining Development Minister Walter Chidhakwa said the Zimbabwe Mining Development Corporation, a State-owned company, will own 40 percent of the venture while Sakunda holds 60 percent.

“We know that there’s a significant quantity of gas underground, with a purity of 95 to 96 percent,” he said.

His remarks on Friday came some six months after he told the Zanu-PF conference in Masvingo that the Government was negotiating a $60m deal with an unnamed investor to prospect for the methane in Lupane.  He did not name the investor then, but we can now justifiably assume that he was referring to Sakunda Energy.

We hail the continued partnership between the Government and Sakunda Energy, a locally-owned company that is also fast developing into a heavyweight in the domestic energy sector.  Before committing $63 million for gas exploration, Sakunda Energy built the $250 million, 100 megawatt diesel-powered electricity plant at Dema near Harare.  Sakunda Energy also supported the Command Agriculture initiative to the tune of $192 million.

The Government-Sakunda co-operation is worth celebrating.  It has come in handy as the Government is facing severe financial constraints thus is unable to meet some of its obligations alone.

In the case of gas exploration, we are unsure whether the Sakunda funding will be spent on new exploration activity altogether or it would be spent to continue existing work at the old sites.  Whatever the case, we commend the company for stepping forward to invest in critical areas of the economy.  We look forward to the agreement resulting in the conclusion of all exploration work on the identified sites.  We say this because for more than 17 years, we have reported many times on exploration work in Lupane, apparently with no conclusion to the work.  Also, we hope this will help, at long last, in quantifying the size of the resource in that specific area.

However, we recognise that gas development demands a huge capital outlay which both Sakunda Energy and the Government may be unable to bear.  In Mozambique companies are investing billions in developing on-shore gas fields.

For example, South African energy company Sasol, in June last year reported that it was investing $1, 4 billion on its on-shore resource
Companies that are investing off-shore could be investing much more.

This therefore means that we need more funding into exploration, gas extraction and development of infrastructure to generate electricity from the resource, manufacture fertiliser and so on.  For this reason, we call upon more companies other than Sakunda Energy to invest in this highly prospective sector of our economy.

The investors can also be foreign, no problem.  The Government has always made it clear that it is open for business into every sector of the economy, natural gas included.