Resized Kudu affordable - Namcor

31 January 2019 | Energy

The National Petroleum Corporation of Namibia (Namcor) is confident that the revised Kudu gas-to-power project, which will now only supply energy to the local market, will be cheaper and more affordable than originally anticipated.

This is according to Namcor spokesperson Utaara Hoveka who recently provided an update on the matter.

“We finalised the technical and engineering studies in terms of the reduced project size. We finalised the recosting of the project. We reran the project economics, which affirmed the viability of the project,” he said.

Without giving an exact amount, Hoveka said the revised project costs were substantially lower than initial estimates.

“We reconfigured the size of the project, to only cater for the Namibian domestic market. As you will know, the initial idea was to cater for both the Namibian domestic market as well as export markets,” Hoveka said.

“We continue to engage government on the type of support framework that the project will require. Some of those elements are acceptable to government, while others are not. We anticipate the finalisation of these engagements pretty soon, which will give direction on the future of the project.”

NamPower did not comment, saying the Kudu task team is not available this week.

Namibia's offshore Kudu gas fields have recoverable reserves estimated at more than 3.3 trillion cubic feet and are a central part of the country's plans to reduce its dependence on electricity imports.

The project has however been delayed since the discovery of the gas fields by Chevron in 1974.

The continued failure to develop the project prompted energy minister Tom Alweendo to air his scepticism over whether it will ever get off the ground.

Alweendo, speaking to the Namibian Broadcasting Corporation (NBC), said he was not sure the project would take off after years of delays due to the related export agreements.

“I have been hearing this thing for a very long time now, but I am not convinced that it is viable, unless you show me otherwise,” Alweendo said.

“If it was viable it would have happened already. If it did not happen for the last 25 years, there is something wrong.”

The project's estimated costs had run into billions of dollars and it would entail gas from the offshore field being transferred to a floating production system before being piped some 170 kilometres to a planned power plant at Oranjemund along the coast.

NamPower said in April last year the planned Kudu power station would be resized from 850 megawatts (MW) down to 442.5 MW, after off-take agreements with South Africa's power utility Eskom and Zambia's Copperbelt Energy Corporation failed to materialise.

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