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Another Spark in Kudu Development in Namibia

Published on Thursday 3rd February 2011

PARTNERS in the Kudu gas field have taken another baby step in developing the project which will pump 500 megawatts of power into the Namibian grid and allow the country to export another 300 megawatts.

Tullow Oil, on behalf of its partners Namcor, Gazprom International and Itochu, has concluded the terms of reference for a new petroleum agreement with the Ministry of Mines and Energy, Offshore Magazine reported last week.

As a result, a revised 25-year production licence should be issued later this quarter.

Although a step forward, Kudu still has a long way to go before it can start powering the nation, Mines and Energy Minister Isak Katali said in response to the latest development.

He's not willing to put his "head on a block" regarding a kick-off date for the project which has been dragging on for years, Katali told The Namibian. "Maybe in October after more consultations," the Minister said.

"But we are pressing hard to get people what they're supposed to do," he said.

According to Offshore, Tullow has also completed a concept selection study for the offshore development of Kudu.

"It is now entering into technical integration discussions with NamPower to optimise design concepts of both the offshore facilities and the onshore Kudu power station. Parallel discussions are under way with NamPower concerning gas supply agreements and for the 800 MW power station," the magazine reported.

Tullow, which has a 31 per cent stake in Kudu, aims to start detailed design of the offshore development this spring, it said.

Gazprom International, which together with Namcor holds 54 per cent of the shares in the venture, in November said that an investment decision on Kudu will be taken before October.

"We are extremely reassured that this is going to happen," Gazprom International chief Boris Ivanov told an African Upstream conference in Cape Town at the time.

Government has set 2013 as the date for Kudu to start producing gas, but it will take four years to develop the project.

The project involves pumping gas from the Kudu field about 170 km offshore to an 800 MW combined cycle gas power station at the coast.

Gazprom agreed to build the plant of nearly US$1,2 billion.

In December, Ivanov was quoted in the company corporate magazine saying that they will explore Botswana, South Africa, Zambia and Angola as possible markets.

He also said that Kudu's "reserves may increase several times over with additional exploration". Ivanov estimated the field holds 50 billion cubic meters of gas (1,8 trillion cubic feet).

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