Central bank bets on Kudu delivery
Gas resources anticipated to come onboard soon
Bank of Namibia Governor Johannes !Gawaxab anticipates that the Kudu power project will become operational before any major planned oil projects.
Bank of Namibia (BoN) governor Johannes !Gawaxab has stated that the bank anticipates the Kudu gas-to-power project to commence operations before production starts on the major oil discoveries announced by international oil companies (IOCs) TotalEnergies’ Venus 1-X and Shell’s Graff 1 projects. This expectation is based on the progress made by the project developer, BW Kudu.
!Gawaxab made the comments during a monetary policy conversation the central bank had with key stakeholders last week.
“From what we have heard, towards the end of this year and next year, there is going to be a final investment decision (FID) on one of the projects, but it appears to me is BW Kudu... is probably going to be faster than oil. They have started to apply for transmission and generation licenses; they seem to have moved far,” !Gawaxab said.
BW Energy entered into a farm-in agreement for a 56% operated interest in early 2017, with the national oil and gas company, the National Petroleum Corporation of Namibia (Namcor), holding a 44% joint venture interest.
Subsequently, BW Energy signed a farm-up agreement with Namcor, increasing the company’s interest to 95% in the licence, closing the transaction in 2021.
Revised plan
BW Energy is progressing with a revised development plan for the gas-to-power project that will utilise a repurposed semi-submersible drilling rig as a floating production unit. Repurposing will enable an optimisation of the project timeline and significantly reduce capital investments compared to previous development concepts.
BW Energy previously told Reuters the FID was expected by September this year, with the first gas anticipated 30 to 40 months thereafter.
With proven reserves of around 1.3 trillion cubic feet of gas, the Kudu offshore field has stood idle since being discovered by Chevron in 1974, some 130 kilometres from the nearest land, close to Lüderitz port.
Oslo-based BW Energy is aiming for an 800 megawatt plant with an initial phase of 420 MW, with roughly half the power destined for Namibia and the remainder to supply regional markets.
The second phase would be built based on "huge appetite" for Kudu's power from South Africa, BW Energy said in June, adding that some firms are also looking for natural gas and LNG to displace diesel, "which we are keen to provide as soon as we can confirm additional gas resources."
-Additional reporting by Reuters
!Gawaxab made the comments during a monetary policy conversation the central bank had with key stakeholders last week.
“From what we have heard, towards the end of this year and next year, there is going to be a final investment decision (FID) on one of the projects, but it appears to me is BW Kudu... is probably going to be faster than oil. They have started to apply for transmission and generation licenses; they seem to have moved far,” !Gawaxab said.
BW Energy entered into a farm-in agreement for a 56% operated interest in early 2017, with the national oil and gas company, the National Petroleum Corporation of Namibia (Namcor), holding a 44% joint venture interest.
Subsequently, BW Energy signed a farm-up agreement with Namcor, increasing the company’s interest to 95% in the licence, closing the transaction in 2021.
Revised plan
BW Energy is progressing with a revised development plan for the gas-to-power project that will utilise a repurposed semi-submersible drilling rig as a floating production unit. Repurposing will enable an optimisation of the project timeline and significantly reduce capital investments compared to previous development concepts.
BW Energy previously told Reuters the FID was expected by September this year, with the first gas anticipated 30 to 40 months thereafter.
With proven reserves of around 1.3 trillion cubic feet of gas, the Kudu offshore field has stood idle since being discovered by Chevron in 1974, some 130 kilometres from the nearest land, close to Lüderitz port.
Oslo-based BW Energy is aiming for an 800 megawatt plant with an initial phase of 420 MW, with roughly half the power destined for Namibia and the remainder to supply regional markets.
The second phase would be built based on "huge appetite" for Kudu's power from South Africa, BW Energy said in June, adding that some firms are also looking for natural gas and LNG to displace diesel, "which we are keen to provide as soon as we can confirm additional gas resources."
-Additional reporting by Reuters
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