Kudu partners sign development agreement
Power utility, NamPower and the National Petroleum Corporation of Namibia (NAMCOR), on Tuesday announced the signing of the Kudu Gas to Power project development agreement (PDA).
In a statement, the partners said the project development agreement brings together the upstream (offshore development) and the downstream (power station development) to ensure that each aspect proceeds through engineering and design to a final investment decision in a coordinated manner.
The agreement also includes Gas Sales Agreement (GSA) heads of terms and provides the basis for further commercial negotiations pertaining to a final GSA following upstream completion of Front End Engineering and Design (FEED).
On signing the project development agreement the upstream partners issued FEED Invitations to Tender for both subsea facilities and the Floating Production System and awarded a contract for an offshore survey of the field area and pipeline route. The FEED work will result in a refined cost estimate for the project, which the partners say is critical information to enable all stakeholders to make a final investment decision.
NamPower has issued the pre-qualification tender for the Engineering, Procurement and Construction of the 800mW Kudu Power Station, and the successful bidder is expected to be finalized towards the end of 2013.
Power export agreement negotiations with secondary off-takers such as Eskom and the Copperbelt Energy Corporation of Zambia are still on-going.
The Zambian energy company has also started joint development agreement negotiations with NamPower for possible equity participation in the Kudu Power Station, in addition to its intent to off-take power from the Kudu Power Station.
According to the current time frame, the Kudu Power Station is expected to come on stream in 2017.
NAMCOR currently has a 54% equity interest in Production Licence 003 which houses the Kudu Gas Field while partners Tullow Kudu Limited and CIECO Namibia have a 31% and 15% interest respectively.
NamPower currently holds a 100% equity interest in Kudu Power Company, a company established to design, build and own the Kudu Power Station at Uubvlei, 25 km north of Oranjemund. NamPower intends to reduce its equity in Kudu Power with the introduction of strategic partners.
NamPower will be the sole buyer of electricity from Kudu Power and will enter into power export agreements for the sale of electricity that is surplus to Namibian requirements.