Name and Location
Ibhubesi gas project (IGP), off the Northern Cape coast, South Africa.

Client
Sunbird Energy has acquired a 76% interest in the production right for Block 2A, within which the Ibhubesi gas project is located, from Forest Oil and Anschutz Corporation. The acquisition enables the ASX-listed company to operate and develop Ibhubesi with South Africa’s national oil company, PetroSA, which will hold the remaining 24%.

Project Description
The IGP is located 380 km north of Cape Town, in Block 2A, which is a production right that covers 5 000 km². The undeveloped gasfield – the largest in South Africa – has 1P reserves of 210-billion cubic feet (bcf) and 2P reserves of 540 bcf.

Value
The project could cost between R10-billion and R20-billion to implement.

Duration
A final investment decision is expected in 2015, with first gas planned for 2018.

Latest Developments
Sunbird Energy expects to sign a gas supply agreement with State-owned power utility Eskom before the end of this year and to supply a volume of gas earlier than originally planned.

Speaking at the Junior Mining Indaba conference in June this year, Sunbird Energy director Dorian Wrigley assured attendees that the price of using Ibhubesi gas would be significantly lower for Eskom than what the utility was currently paying for diesel for its Ankerlig power plant.

Ankerlig is burning diesel between $25/GJ and $30/GJ.

“We’ve got the first draft of our gas sale agreement, which has gas volumes and terms, and now we’re looking to get a gas sale agreement with Eskom before year-end,” said Wrigley. Sunbird is confident of taking the project to bankable feasibility stage, which will first require $5-million and then another $15-million. Thereafter, the company will consider a big farm-out partner to be part of the process of developing Ibhubesi into a $1.5-billion operation. Sunbird plans to build an overengineered gas pipeline to Ankerlig, with a spur into Saldanha, so that the pipeline can double as a storage vessel.

Although South Africa still has to firm up its regulations about how gas assets will be developed, Ibhubesi is in the fortunate position of already having a gas production licence. A five-year gas sale phase is planned before the clock starts ticking on a 25-year build-up to full-scale gas production at Ibhubesi, which is regarded as a potential catalyst for further gas development in South Africa.

Key Contracts and Suppliers
MHA Petroleum Consultants (field development plan) and WGK (engineering and project management services).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Sunbird Energy, tel +61 8 9463 3260, fax +61 8 9462 6630 or email info@sunbirdenergy.com.au.
PetroSA group communications manager Thabo Mabaso, tel +27 21 929 3365 or email thabo.mabaso@petrosa.co.za.
MHA Petroleum Consultants, tel + 303 277 0270 or fax +1 303 277 0267.
WGK director for corporate communications: eastern hemisphere Carolyn Smith, tel +44 1224 851099 or email carolyn.smith@woodgroup.com.