PERTH (miningweekly.com) – ASX-listed energy hopeful Sunbird Energy on Thursday revealed plans to fast-track the commercial development of its Ibhubesi gas project, offshore South Africa.
The decision came after the company signed a memorandum of understanding with South African electricity utility Eskom to jointly invest in the sale of indigenous gas from the Ibhubesi project to the 1 350 MW Ankerlig power station, north of Cape Town.
“Since we acquired the right to a 76% interest in Ibhubesi just over 12 months ago, Sunbird has achieved a series of major project milestones to unlock the huge value of our proven reserve base,” said MD Will Barker.
A maiden reserve of 540-billion cubic feet was recorded, while a full technical and commercial feasibility study was completed, and approval for the transfer of title and operatorship was received.
The company also received development funding from the US Trade and Development Agency.
Barker said the company would now work to complete a preliminary field development plan and basis of design studies for the Ibhubesi project, while also starting front-end engineering and design studies.
Regulatory approvals, including an environmental-impact assessment, would also be progressed while the company advanced gas sales negotiations with Eskom.
A final investment decision on the Ibhubesi project, which has been identified as a major part of one of government's 18 strategic infrastructure projects under the Presidential Infrastructure Coordinating Commission, was expected in early 2015.
The initial phase of Ibhubesi, which is located 380 km north of Cape Town and 105 km offshore, could involve an investment of between R12-billion and R14-billion to produce 28.3-billion cubic feet of gas yearly over an initial six- to eight-year horizon.
Eskom plans to replace Ankerlig’s existing high-cost diesel feedstock with natural gas and convert the plant from an open-cycle gas turbine to a closed-cycle gas-turbine facility.