Name and Location
Ibhubesi gas project, 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
An independent reserves certification of the Ibhubesi gas project has yielded proven and probable reserves of 540 billion cubic feet (bcf), with Phase 1 designed to exploit proven reserves of 210 bcf to produce 28.3 bcf a year of gas over an initial six- to eight-year horizon.

The technical assessment confirms that the planned Phase 1 development can be achieved without the need for further exploration or appraisal drilling.

Should additional resources be strengthened, the project’s life could be extended to beyond 15 years and into Phase 2.

Value
The initial phase of the project could involve an investment of between R12-billion and R14-billion.

Duration
A final investment decision is expected in 2015, with first gas planned for 2017.

Latest Developments
State-owned power utility Eskom has signed a memorandum of understanding (MoU) with Sunbird to jointly investigate the feasibility of securing gas from Sunbird’s offshore Ibhubesi gas project to supply Eskom’s 1 350 MW Ankerlig power station, located about 40 km north of Cape Town.

This comes as Eskom advances its plans to replace Ankerlig’s existing high-cost diesel feedstock with natural gas and convert the plant from an open-cycle gas turbine (OCGT) to a closed-cycle gas-turbine facility.

Under the MoU, ASX-listed Sunbird and Eskom have agreed to jointly investigate the economic and commercial viability of developing Ibhubesi in the 5 000 km2 Production Right Block 2A, located off the West Coast of South Africa.

The utility will be tasked with completing several studies to determine the viability of indigenous gas sales from Ibhubesi, including identifying the governance process for the replacement of the existing diesel feed stock with indigenous natural gas, in conjunction with Ankerlig’s OCGT conversion project.

Eskom will further be held responsible for determining the procurement process necessary for a formal gas sales agreement to be entered into in respect of Ibhubesi.

Meanwhile, under the MoU, Sunbird will complete the field development plan and the front-end engineering and design plan for Ibhubesi.

The agreement will also result in the establishment of a working group, comprising representatives from both parties, who will progress the objectives of the MoU.

Sunbird Energy chairperson Kerwin Rana says the agreement with Eskom is a significant milestone in the project’s development and will likely result in the delivery of an indigenous gas supply to the “energy-constrained” West Coast of 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 or fax +61 8 9462 6630.
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, corporate communications – eastern hemisphere, Carolyn Smith, tel +44 1224 851099 or email carolyn.smith@woodgroup.com.