US Firm Plans to Convert Deadly Congo Methane Into Power

(Bloomberg) -- Winds Exploration and Production LLC, a Houston-based company, said it plans to start building a $300 million power and fertilizer complex in a year’s time using methane trapped under the Democratic Republic of Congo’s Lake Kivu. 

The plan, which Winds still needs to finance, tackles two problems - providing electricity to one of the world’s least electrified nations and gradually removing gas that’s at risk of escaping and asphyxiating people and animals in a densely populated area. 

The methane and carbon dioxide trapped under the lake, estimated at 66 billion and 300 billion normal cubic meters respectively, which straddles Congo’s border with Rwanda, has long been considered a threat. A so-called limnic eruption at Lake Nyos in Cameroon in 1986 led to the suffocation of more than 1,700 people and twice as many livestock as a gas cloud spread 25 kilometers (16 miles) from the water body.

“We are investing to ensure that the lake is safe for residents, capture the CO2 and methane rather than flare them and convert them to urea and electricity,” the company said in a response to questions.

The plan, which comes after Winds signed a production sharing agreement with the government this month, will see $80 million spent on a gas extraction plant, $20 million on a power facility and $200 million on an operation to produce urea fertilizer. Total investment could ultimately rise to $500 million when a pipeline is built to supply methane to local industries and the carbon dioxide is converted into chemicals.

The venture would be the first new, large-scale hydrocarbon project in Congo in decades and is part of a controversial tender for 30 oil and gas blocks throughout the country. 

A second company that signed a production sharing agreement this month, Canada’s Alfajiri Energy Corp., didn’t respond to multiple requests for comment via its website, email, lawyer and social media. 

Both companies have faced scrutiny from environmental organizations for their lack of experience and track records in the industry. Rainforest Foundation UK called for more transparency from the companies and government about their projects. 

“This opaque selloff of fossil fuel concessions just three months before presidential elections are due in the Democratic Republic of Congo raises serious questions about who really stands to benefit,” Joe Eisen, executive director of Rainforest Foundation UK said in a statement, in which he urged Congo to instead focus on renewable energy.

Electricity production from methane is part of Congo’s plan to expand energy access to almost a third of its population by 2030 from about 10%. Lake Kivu contains enough methane — produced in part by microorganisms and dissolved in its deep waters — to generate an estimated 700 megawatts of electricity for more than 50 years. Congo’s installed generation capacity is about 2,500 megawatts. 

Rwanda has been exploiting the fuel to produce electricity on its side of the lake for several years. 

No Signing Bonus

Symbion Power, which developed two of the Rwandan projects, is planning a 60-megawatt gas-to-power project on Congo’s Makelele block.

The New York-based company is still negotiating its agreement, Chief Executive Officer and Chairman Paul Hinks told Bloomberg this week. 

“The negotiations are taking longer than expected but this is not entirely surprising given that it is a large investment of over $300 million,” Hinks said. 

The methane production sharing agreements are Congo’s first under its most recent hydrocarbons law, which has slowed the process, according to the government. Winds described its agreement as “unconventional,” given the multiple components of its plan and said it had convinced the government that given the nature of its project it should not have to pay a signature bonus.

“The position of government was that they are new to this and therefore willing to keep an open mind to negotiate the areas and aspects of oil and gas transactions not completely covered by the existing framework,” the company said.  

The venture is 80% controlled by the company’s Congo affiliate, Winds E&P Sarl, with the rest belonging to state-owned Sonahydroc Sarl.

Congo’s oil ministry didn’t respond to requests for comment.

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