The Namibian Kudu gas-to-power project, which is aimed at easing Namibia’s reliance on imported electricity, has received a boost as a result of BW Kudu, a wholly-owned subsidiary of Singapore-based BW Offshore, formally taking over as the upstream operator on the licence. BW Kudu has a 56% working interest, with the National Petroleum Corporation of Namibia (Namcor) retaining 44% interest in the Kudu licence.

Kudu gas to power project gets new upstream operator1The Kudu gas field, which was discovered by Chevron in 1974 approximately 170 km off the Namibian coast, needs gas to be produced by a floating production unit before being exported by pipeline to an 885 MW gas-to-power plant onshore. The Kudu gas project, which was initiated in 1997 and established in 2005, was expected to be commissioned by end of 2017. The project has, however, been delayed by the upstream side of the project.

Late last year, the project was downsized from 800 MW to 442 MW. The decision to scale down the project to 442MW was taken at a stakeholders meeting that included Namcor, BW Offshore, NamPower and the Namibian government.

BW Offshore has now started working with government, Namcor, NamPower, large infrastructure investors and other stakeholders to get this massive project to its final investment decision, the company said in a statement. According to local media, the Namibian government is yet to decide whether to commit any funds to the development of the Kudu project. The project, which was initially expected to cost US$1.2 billion, is now expected to cost around US$600 million.

Namcor selling 56% of the shares in the project was a requirement as a result of the fact that the Namibian government had at first refused to bankroll the project, saying Treasury did not have sufficient funds to pay for this project for the next 10 years. Namcor had been struggling to find a partner for two years until BW Offshore bought the remaining 56% last year.

Reports indicate that Namibia’s power utility, NamPower, which owns 51% shares of the downstream project, is also looking at selling shares. In addition, talks between NamPower, Namcor and several partners are looking at concluding several important agreements, among them the gas sales agreement.

Image credit: http://www.mme.gov.na/petroleum/kudugas/


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