Government reluctance delays Kudu
The planned development of the Kudu-to-gas power project has been delayed again because of government's reluctance, at this stage, to agree to a gas sales agreement with its developers, the National Petroleum Corporation of Namibia and Anglo oil firm, BW Offshore.
The gas sales agreement secures its developers of a secured off-taker, or purchaser, for electricity produced from the planned construction of a power station to be developed north of Oranjemund.
Providing a brief update on the development of Kudu, Namcor spokesperson Utaara Hoveka said an investment decision regarding Kudu cannot be taken without the security of having a buyer for the electricity, which at this point is government.
“This was not concluded as the gas sales agreement which requires input from government has not yet been concluded. Also, the final form of government support for the project has also not yet been concluded,” he said of the delay behind the project's implementation. In February 2017, Namcor roped in UK-based developer BW Offshore for the planned commercialisation of the project. As developer, BW Offshore acquired a 56% stake through a farm-out agreement.
A company may decide to enter into a farm-out agreement with a third party if it wants to maintain its interest but wants to reduce its risk, or doesn't have the money to undertake the operations that are desirable for that interest. Explaining BW Offshore's role in the project, Hoveka said the Anglo firm's role would be to aid in the development of the ambitious project which has been bogged down by consistent delays.
“BW Offshore was added onto the Kudu license following the signing of a Deed of Assignment to that effect by the mines and energy minister. The farm-out agreement signed between Namcor and BW Offshore details the reasons for their entry onto the Kudu license, which are to essentially participate with us in the development of the project. BW Offshore has become the operator,” Hoveka said. Once developed, gas from the Kudu resource situated off the coast of southern Namibia westwards of Oranjemund will be transported through a 170-kilometre pipeline to a power station that will be built and situated at Uubvlei, approximately 25 kilometres north of Oranjemund. NamPower is developing the 800 MW (nominal) Kudu Power Station through the KuduPower (Pty) Limited, a special purpose vehicle that was established in 2005. The Kudu Power Station is anticipated to be the first combined cycle gas turbine power station of this size in southern Africa.
OGONE TLHAGE
The gas sales agreement secures its developers of a secured off-taker, or purchaser, for electricity produced from the planned construction of a power station to be developed north of Oranjemund.
Providing a brief update on the development of Kudu, Namcor spokesperson Utaara Hoveka said an investment decision regarding Kudu cannot be taken without the security of having a buyer for the electricity, which at this point is government.
“This was not concluded as the gas sales agreement which requires input from government has not yet been concluded. Also, the final form of government support for the project has also not yet been concluded,” he said of the delay behind the project's implementation. In February 2017, Namcor roped in UK-based developer BW Offshore for the planned commercialisation of the project. As developer, BW Offshore acquired a 56% stake through a farm-out agreement.
A company may decide to enter into a farm-out agreement with a third party if it wants to maintain its interest but wants to reduce its risk, or doesn't have the money to undertake the operations that are desirable for that interest. Explaining BW Offshore's role in the project, Hoveka said the Anglo firm's role would be to aid in the development of the ambitious project which has been bogged down by consistent delays.
“BW Offshore was added onto the Kudu license following the signing of a Deed of Assignment to that effect by the mines and energy minister. The farm-out agreement signed between Namcor and BW Offshore details the reasons for their entry onto the Kudu license, which are to essentially participate with us in the development of the project. BW Offshore has become the operator,” Hoveka said. Once developed, gas from the Kudu resource situated off the coast of southern Namibia westwards of Oranjemund will be transported through a 170-kilometre pipeline to a power station that will be built and situated at Uubvlei, approximately 25 kilometres north of Oranjemund. NamPower is developing the 800 MW (nominal) Kudu Power Station through the KuduPower (Pty) Limited, a special purpose vehicle that was established in 2005. The Kudu Power Station is anticipated to be the first combined cycle gas turbine power station of this size in southern Africa.
OGONE TLHAGE
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