Commercial agreements hamper development of Kudu gas field

WINDHOEK – Efforts to develop the Kudu gas project off the southwestern coast of Namibia near Oranjemund is hampered by the failure to reach commercial agreements with gas buyers.

Tullow Kudu Limited’s General Manager, Peter Owens, made the announcement during the handing over of scholarships to 21 engineering students at the Polytechnic of Namibia last Thursday.
In a fresh attempt to find a solution, Owens pointed out that the company carried out detailed studies throughout 2008 on an alternative development scheme in conjunction with NamPower.
In this alternative scheme gas is compressed at the field and transported to shore in purpose-built shuttle tankers, rather than by conventional pipeline. This provides the flexibility for gas to be delivered to more than one destination and it will allow Walvis Bay to be considered a prime delivery location, where gas can be used for power generation and by industrial and transport users as an alternative fuel to diesel and Liquefied Petroleum Gas (LPG),’ he explained.
According to Owens, his company remains hopeful that commercial arrangements can be agreed with gas buyers this year to bring Kudu gas ashore in the not too distant future.
The initial development concept for the Kudu gas field was based on supplying gas to an 800 MegaWatt base load power station developed and operated by NamPower with electricity in excess of Namibia’s requirements being absorbed by the South African market.
However, recent developments in power generation priorities in the SADC region and the emerging potential for supplying gas to the industrial and transport markets as a replacement for diesel, Heavy Fuel Oil (HFO) and LPG, have provided alternative development options.
According to information released on the company’s website the fast maturing marine compressed natural gas (CNG) technology offers the means for these options to be seriously considered.
Technical and commercial studies are currently being conducted to confirm the viability of these options.
Whilst development of the Kudu main field area remains the key area of focus, Tullow is also committed to proving and commercialising the potentially significant reserves upside within the Production Licence area. Current exploratory appraisal efforts are now focused on locating extensions of the Kudu main field reservoir within the licence area.
Tullow has been involved in the Kudu gas project since 1993 and took over as an operator in 2003.
Since then, over N$2 billion has been spent on drilling and field development studies.
– Nampa

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