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A final investment decision is expected mid-2016 on Namibia’s Kudu gas-to-power project, which is expected to boost electricity security in the southwest African country
According to a senior official, the project, where costs have doubled to around US$2.3bn, will transfer gas from the offshore Kudu field to a floating production system, before being transported 170km to a planned 885MW power plant at Oranjemund.
Immanuel Mulunga, managing director of National Petroleum Corporation of Namibia (Namcor), said, “We are on track. We should be able to make a final investment decision or financial close by June next year.”
Namcor owns 44 per cent of the upstream venture. Mulunga added a technical operator, which will also take the 31 per cent equity vacated by Tullow Oil, was selected and negotiations were ongoing.
Discussions were also continuing with the World Bank's private arm — International Finance Corporation (IFC) — over the possibility of it taking an equity stake in the venture, he added.
The project expected to produce first power at the start of 2019. The Kudu field has proven reserves of around 39.65bn cu/m of gas.
Mulunga said a gas sales agreement between the upstream partners and Kudu Power had been drafted and agreed to the fullest extent possible, while talks with preferred contractors for the subsea pipelines and floating production system were expected to be concluded early in 2016.
Once the power plant is built, it is expected to provide Namibia with 400MW of power and between 100-300MW of surplus power will be purchased by South Africa’s state-owned utility Eskom.
Zambia’s Copperbelt Energy Corporation has also agreed to buy up to 300MW of electricity to supply its key mining sector.