By Confidente Reporter
THE Kudu gas project will generate at least N$2.5 billion in revenue for the fiscus from its upstream part of the project, Confidente has learnt.
Namcor’s communications and public relations specialist, Utaara Hoveka, revealed that the parastatal had managed to lower the cost of its upstream project from US$1.4 billion (N$14.84 billion) in 2014 to about US$978 million (N$13.26 billion).
“Namibia will for the first time cater for its own power needs and also become a net exporter of power to regional markets. The upstream part of the project alone will be paying N$2.5 billion in annual taxes to the government of the Republic of Namibia. This is clean energy
You will see from the summary below that the upstream project costs have actually decreased from an initial US$1.4 billion in 2014 to a current amount of US$978 milwith little or no impact to the environment. lion, despite average downward fluctuations in the Namibian dollar to American dollar exchange rate.
“The favourable price decrease is largely attributed to the downturn in the global oil price, which has seen a reduction in prices of almost all major oil and gas services. Consequently, envisaged prices of key services for the Kudu gas to power project such as drilling, construction and lying of the pipeline have significantly reduced.”
Hoveka also disclosed that once the Kudu gas project becomes operational the country will save N$4 billion annually its using to purchase electricity from other countries.
“The N$4 billion dollars currently used for the purchase of power from other countries, will be repatriated back to Namibia. This will be a significant saving. Namibia will transition from an exploratory to a gas producing country. Part of the proceeds from Kudu will be reinvested into other exploration ventures,” Hoveka said.
Namcor also announced that the upstream part of the Kudu gas project is set to employ not less than 50 people once operational.
“The upstream part of the project alone will employ no less than 50 people who will be absorbed within Namcor and the project at large. We expect the official announcement of the project to take place after the Final Investment Decision (FID), which is likely to take place in the third quarter of 2017.
“Namcor remains firm in its commitment to bring this noble project to its full fruition. We look at the multifaceted benefits the Kudu gas to power project has to offer, with great excitement and fascination,” Hoveka said.
Namcor last week announced that it had agreed to accept an investment offer from BW Kudu Limited for a 56 percent work¬ing interest in the Kudu power project.
The upstream (gas field) and downstream (power station and transmission) elements of the project are owned and promoted separately. The upstream comprise of an unincorporated joint venture of developers put together by the National Petroleum Corporation of Namibia (NAMCOR), the state-owned oil and gas company, and the lead developer and promoter for the downstream is the Namibia Power Corporation (NamPower), the state-owned power utility of Namibia.
The upstream developers, Namcor and BW Kudu have entered into a Joint Operating Agreement to develop and exploit the Kudu gas field.
The parastatal also added that it had agreed to transfer the role of field operator to BW Kudu, but will work closely together with BW Kudu within a joint team as the field is prepared for the FID and the subsequent field development (which will in¬clude the drilling of production wells, the construction of subsea and gas transmission pipelines and the installation of a Floating Production System (FPS).
The Kudu Gas-to-Power pro¬ject is a key power generation project which will decrease re¬liance on imported power and accelerate economic develop¬ment. It involves the develop¬ment of the offshore Kudu gas field to deliver gas through a 170km-long pipeline to a power station to be built at Uubvlei, some 25 kilometres northeast of Oranjemund. The station will be connected to the Namibia and South African electricity grids by new transmission lines, Namcor announced.
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