Ibhubesi gas supply deal with Eskom expected before year-end
ASX-listed Sunbird Energy, which is developing the Ibhubesi natural gas project off the shore of the Western Cape, expects to sign a gas supply agreement with State power utility Eskom before the end of this year and to bring on a volume of gas earlier than originally planned.
Speaking at the recent Junior Indaba con-ference, Sunbird Energy director Dorian Wrigley assured that the price of using Ibhubesi gas would be significantly lower to Eskom than what the utility was currently paying for diesel for its Ankerlig power plant.
Ankerlig is currently burning diesel at a cost of $25/GJ to $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 would first require $5-million and then another $15-million.
Thereafter, it would look for 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.
Sunbird acquired Ibhubesi from Forest, which exited after investing $125-million in the 540-billion cubic foot (bcf) gas resource, which is seen to be expandable to 8 000 bcf.
A five-year gas sale phase is planned before a 25-year clock begins ticking on full-scale gas production at Ibhubesi, which is seen as a potential catalyst for further gas development in South Africa.
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