US company set for methane gas extraction on Lake Kivu

ContourGlobal, a US energy company, is set to acquire Kibuye methane gas concessions from the government to start extractions on the high scale. The US company is currently carrying feasibility studies on Lake Kivu for methane gas. Sources in the Ministry of Infrastructure have disclosed that ContourGlobal may soon acquire the rights from government to extract methane gas from Lake Kivu. If given a go ahead, ContourGlobal would produce up to 100 megawatts of electricity. In an interview recently, the interim Director General of the government’s methane gas project (UPEGAZ), Charles Nyirahuku said that ContourGlobal agents are expected to provide a full programme of how they would work. Nyirahuku said that by the end of next month, the government would have decided on whether to grant the gas concession to ContourGlobal after reviewing its feasibility study. He said that ContourGlobal has proven the capacity to work and he hopes they would get the contract. We are hopeful. Many (other companies) of them failed, they have always failed to meet their commitments, he said. ContourGlobal has energy investments in various countries including the US, Columbia, Brazil, Togo and Peru. In the past, many companies have failed to deliver on their commitments with the government to exploit the gas and their contracts and Memoranda of Understanding (MoUs) have aborted. The current MoU between government and ContourGlobal allows the US company to extract methane gas to produce 50 megawatts (MW) of electricity. But with further negotiations, that’s bound to increase to 100 MW, Nyirahuku said. He said ContourGlobal will need around US$130 million to carry out the extraction. He said that the government will make sure the deal with the company is fair. We want to secure the most favourable deal for Rwanda, he said. If ContourGlobal acquires gas concessions in Kibuye, it will become the second company in the business. The other one is the Rwanda Investment Group (RIG). RIG has a contract to work together with the government and produce up to 100 megawatts of electricity by extracting methane gas. Currently, Rwanda needs more electricity to meet the high demand due to service its fast growth and developing sectors. With its current electricity peak load of 50MW, the country can’t satisfy its power demands. Its hydroelectricity is only 35 percent of this peak load, while the remaining 65 percent is thermal energy. With a target to have a 150MW electricity peak load in 2012, the country needs to produce at least 100MW more. That is the reason why the government wants to have methane gas on Lake Kivu extracted. Nyirahuku said that government is interested in companies that can invest in methane gas extraction and have a tariff proposal of selling electricity at 6 cents (of US dollars) per kilowatt. Last month, Lake Kivu Energy (Canada) Inc., one of the companies that had signed a MoU with government, exited without the company accomplishing any of its commitments. Nyirahuku said that government will for the time being deal with ContourGlobal and RIG as the two companies continue to show commitments to their promises. Other companies engaged in methane extraction, he said, will have to partner with either RIG or ContourGlobal.Ends

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US company set for methane gas extraction on Lake Kivu