---

Sasol leads Karoo shale gas mission

21 July 2010

South African petrochemicals giant Sasol, Norway's Statoil and US firm Chesapeake Energy Corporation have been awarded a permit to prospect for shale gas – a potentially "game-changing" source of clean natural gas – in the country's Karoo Basin region.

The 12-month technical cooperation permit, which does not allow for any surface activity or drilling, covers an area of approximately 88 000 square kilometres, located primary in the Free State but also covering areas in South Africa's Eastern Cape and KwaZulu-Natal provinces.

The joint venture partners plan to evaluate existing and available geological information within the area to determine the potential for extracting shale gas.

The study work will include the sampling and analysis of existing geological cores that were drilled by former state company Soekor while searching for shale oil in the 1970s and 1980s. The same shale formations are now being assessed for potential gas production.

Technology advancement

This concept follows recent global developments in shale gas, where technology advancement in drilling and extraction technologies has allowed for economic development of significant shale gas resources.

If the geological evaluation proves successful, Sasol says the partners will consider committing to a more extensive exploration programme in the Karoo Basin.

South Africa's Karoo Basin has unproved shale gas potential, and significant exploration efforts are required to assess and quantify this prospective resource.

"A discovery of large recoverable shale gas reserves in the Karoo Basin will be a game changer in the broader South African energy market context and will likely constitute a major step to further develop gas transmission and distribution infrastructure in the country", Ebbie Haan, MD of Sasol Petroleum International, a wholly-owned oil and gas subsidiary of Sasol, said in a statement this week.

Energy security, job creation

Large gas discoveries in the Karoo Basin could also help alleviate South Africa's power and fuels shortage and assist in creating employment and wealth for the country.

In addition, Sasol says the increase of natural gas in South Africa's energy portfolio would significantly aid in the reduction of greenhouse gas emissions on a per unit basis compared to more conventional resources such as coal.

"But we are at the beginning of a journey that requires technical risk reduction, environmental stewardship, stakeholder alignment and, in case of success, significant future capital investment," Haan said.

Shale gas is clean natural gas produced from shale, a type of sedimentary rock consisting mainly of clay and some organic matter.

It has become an increasingly important source of natural gas in the United States over the past decade, and interest has spread to potential gas shale formations in Canada and Europe, and now also in South Africa.

SAinfo reporter