Namibia's Kudu Power and Offshore Gas Project Takes Major Step Forward

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The Kudu power project is moving ahead after years of discussion and the balancing of various interests. The project is to be sited on the Namibian coast and is to receive its fuel from a gas field 170 kilometers offshore in the South Atlantic.

NamPower (Windhoek), Namibia's power utility, has issued the pre-qualification tender for the engineering, procurement and construction (EPC) of the 800-megawatt (MW) power plant. EPC tender negotiations with a successful bidder are expected to be finalized and a contract awarded toward the end of this year. The closing date for the pre-qualification tender is May 3.

Power export agreement negotiations with secondary off-takers Eskom (Johannesburg, South Africa) and the Copperbelt Energy Corporation (CEC) (Zambia) are ongoing. CEC is also beginning negotiations with NamPower for possible equity participation in the Kudu power station, in addition to the power take-off potential. Kudu is expected to be operative in 2017.

Nampower currently holds a 100% equity interest in Kudu Power Company, which was established to design, build and own the power station at Uubvlei, 25 kilometers 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 it will enter into power export agreements to sell electricity that is surplus to Namibia's domestic needs.

The signing by Nampower and Namcor of the Kudu Gas power project development agreement (PDA) is essential for the progress of the project, as it brings together the upstream and power station development to ensure that both proceed through engineering and design to a final investment decision. On signing the PDA, the upstream partners issued front-end engineering design (FEED) invitations to tender for both subsea facilities and the floating production system, and awarded a contract for an offshore survey of the gas field area and pipeline route. The FEED work will result in a refined cost estimate for the project.

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