ICC, Slide 1, 31 October 2007 ICC Windhoek, October 2007 Kudu Gas to Power Project – Contributing...
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Transcript of ICC, Slide 1, 31 October 2007 ICC Windhoek, October 2007 Kudu Gas to Power Project – Contributing...
ICC, Slide 1, 31 October 2007
ICC Windhoek, October 2007ICC Windhoek, October 2007
Kudu Gas to Power Project – Kudu Gas to Power Project – Contributing to regional supplyContributing to regional supply
presented by Margaret van der Merwepresented by Margaret van der Merwe
Generation Projects: Power System Development, NamPowerGeneration Projects: Power System Development, NamPower
ICC, Slide 2, 31 October 2007
Content
Background and key components
Challenges and Solutions
Benefits
Conclusion
(Courtesy of Tullow)
ICC, Slide 3, 31 October 2007
Kudu gas field history – key milestones 1974 - Discovered by Chevron/Regent/Soekor
1993 - Licence awarded, drilled four wells
– Shell (75%), Energy Africa (25%), Energy Africa farm-out 15% to Texaco
Various licence holder changes
– 2002 - Shell relinquished to ChevronTexaco (60%), Energy Africa (40%)
– 2003 – ChevronTexaco relinquished to Energy Africa (100%)
– 2003 - Energy Africa (90%), Namcor (10%)
– 2004 - Tullow Oil acquires Energy Africa
– 2007 - Tullow indicated Itochu farm-in (20%)
2007
– Tullow indicated plan to do more exploration/appraisal drilling wells to test multi-tscf play
– Kudu-8 drilled, gas bearing sands thicker and better quality than Kudu-5, but lower permeability, unaided production flow rate would not exceed Kudu-5
– Results to be incorporated in geological model for the area in advance of any decisions on further drilling (Courtesy of Tullow)
ICC, Slide 4, 31 October 2007
Upstream project concept (Courtesy of Tullow)
ICC, Slide 5, 31 October 2007
Challenges
ICC, Slide 6, 31 October 2007
Kudu Project – Challenges
The Kudu project as base load gas to power consists of three
components:
– supply of gas;
– conversion of gas to power;
– off-take (sale and purchase) of power.
Without agreed terms of commercial arrangements between the
components there can be no further development of:
– financing arrangements for the gas to power component;
– technical arrangements of any component.
Agreement of commercial terms and conditions is challenged by
mutually acceptable:
– allocation of foreign exchange risks;
– acceptable liability regime (risk package); and
– price levels.
ICC, Slide 7, 31 October 2007
AverageDaily Demand
0.5
0.6
0.7
0.8
0.9
1
1.1
1.2
1.3
1.4
1.5
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hours of Day
Ho
url
y D
em
an
d a
s %
of
year'
s a
vera
ge d
em
an
d
Off peak Shoulder Peak Namibian High Season Load
ICC, Slide 8, 31 October 2007
Unlocking value of gas
The base load Kudu project consists of :
– supply of gas to a power station in Namibia;
– conversion of gas to power in Namibia;
– transmission lines connecting the Namibian power station to the Namibian and South African grids for the off-take of power in Namibia to Namibia and South Africa.
The mid merit/peaking Kudu project consists of :
– supply of gas to a power station in Namibia as well as to an import/export pipeline between Namibia and South Africa;
– conversion of gas to power in Namibia;
– transmission lines connecting the Namibian power station to the Namibian and South African grids for the off-take of power in Namibia to Namibia and South Africa;
– import/export pipeline between Namibia and South Africa;
– conversion of OCGT power station at Ankerlig to CCGT.
ICC, Slide 9, 31 October 2007
Evaluation: Power in Namibia, Excess Gas and Power to South Africa
1. Security of Energy Supply (Electricity and Gas)
• Power Station in Namibia
• Power Supply to Namibia during non-generating hours
• Bi-directional pipeline
2. Value of Project including Speed of Implementation, Cost and Risk of Electricity Supply
3. Consistency with GRN Energy Policy
4. Strategic Benefits to Namibia and region
5. Macro-economic Benefits to Namibia and region
Kudu CCGT PSKudu CCGT PS Ankerlig CCGT PSAnkerlig CCGT PS
690 km Gas Pipeline with compression
Kudu Gas Field, Offshore Pipeline & Conditioning
GTF
APS
KPS1
2
NAMSA Pipeline
A
B
ICC, Slide 10, 31 October 2007
Kud
u Po
wer
Pro
ject
Pla
n
1st Quarter 2008: Final Investment Decision
2008: Construction Starts
5 July 2004: Signing of JDA & MOU, Feasibility Phase Started
2011: Commercial Operation
ICC, Slide 11, 31 October 2007
GRN supporting development of Kudu
2004:
− Cabinet declared project of National Importance, Ad Hoc Cabinet Committee on Kudu Established
2005:
− Cabinet approval for NamPower’s investment in strategic projects
2006:
− Cabinet approval for GRN equity injection into NamPower to develop Strategic Projects - Budgetary allocation
− Cabinet approve establishment of re-enforcement team to assist NamPower in negotiation
− Heads-of-State meeting pledge regional support to unlock value of Kudu
• 2007:
− Heads-of-State meeting re-emphasizes support to development of Kudu
− Bilateral Gas Trade Commission tasked task force to identify areas of support and facilitation required to progress Kudu
ICC, Slide 12, 31 October 2007
Benefits of the Kudu Project
• Employment− during construction about 1500
− operation about 70
• Development of Namibian skills and experience− CCGT power stations
− infrastructure of similar type and scale to the Kudu CCGT power station
− international projects generally
• Catalyst for general development investment in local area as a whole− Housing and Accommodation
− Office facilities
− Roads upgrade
− Harbour Facilities in Luderitz for landing of equipment
− Electricity, Water, Sewerage, etc
− Medical and Emergency Services
− Secondary Industry :Cleaning Services, Catering, Trade, Maintenance of Vehicles, Transportation, Recreational, Tourism, etc
ICC, Slide 13, 31 October 2007
Conclusion
Growth in the Namibian economy caused and requires growth in electricity demand, out stripping the current supply options
− Kudu Power Project is a generation option in Namibia to ensure the availability of reliable electricity supply
Kudu Project will kick-start economic growth given its massive investment
− Kudu Project supports Namibia’s vision and objectives in advancement through Technology and Innovation
− The commercialization of gas onshore will be a catalyst to the development and growth in the gas industry
Kudu Project requires multi-sector, inter-ministerial, inter-agency and inter-governmental support and co-ordination
Getting it right will instill investor confidence in the region
ICC, Slide 14, 31 October 2007
Thank You
ICC, Slide 15, 31 October 2007
Integrated Project Structure
Import/Export PipelineGas
TreatmentFacility
Kudu Power Station
NamibianTrans-mission
Grid
RSATrans-mission
Grid
AnkerligPowerStation
Gas FieldOffshore Pipeline
PipeCo
NamPower & Others
Tullow & Itochu & Namcor
Eskom EskomNamPower
Gas in PipelineSpec Gas
Power
Wet Gas
PowerGas to Power Power from Gas