Name and Location
Kudu combined-cycle gas turbine (CCGT) project, near Oranjemund, Namibia.

Client
Nambia Power Corporation (Nampower – 51%), CEC Africa (30%). Other equity partners for the remaining share are still to be selected.

Project Description
The project involves the development of the Kudu gasfield, located off Namibia, which contains an estimated 1.3-trillion cubic feet of gas.

The gas produced will be delivered to a 800 MW CCGT power station, 25 km outside Oranjemund, through a 170-km-long pipeline.

The project will be connected to the Namibian and South African grids.

NamPower will buy power from the plant under long-term power purchase agreements for local and regional use.

Value
The project is estimated at $2.6-billion.

Duration
Commercial operations are expected in the first quarter of 2018.

Latest Developments
Namibia's 885 MW Kudu gas-to-power project is still on track with a final investment decision expected by June 2015, the Mines and Energy Ministry has said.

Despite objections by an energy lobby group against the generation licence application by the government power utility NamPower for its subsidiary Kudu Power and British company Tullow Oil pulling out as project partner last month, Kudu will go ahead.

"It is a national project and will achieve Namibia's aim of self-sufficiency of power supply," Erastus Kahuure, permanent secretary in the Mministry has said.

"We are aware it is a complex project on the upstream and downstream side and Tullow's pull-out will not impact project development timelines," Kahuure adds.

Other investors are interested in filling the gap left by Tullow, the government official notes without disclosing names.

Zambia's independent CEC Energy company will buy 300 MW and the power export agreements' term sheets have been provided to South Africa's national power utility Eskom as second offtaker says NamPower's managing director Paulinus Shilamba.

Leake Hangala – Shilamba's predecessor at NamPower – has publicly questioned the economic viability of the $2.6-billion megaproject.

"We must ask as business people and as taxpayers if the Kudu gas project is economically viable," Hangala told the national energy forum hosted by the Namibia Chamber of Commerce and Industry.

Similarly the newly emerging Consumer Advocacy for Energy (CAE) group has officially objected to NamPower's electricity generation licence application at the Electricity Control Board (ECB), citing "fears of monopoly and electricity tariffs becoming unaffordable for consumers".

Last month the ECB informed NamPower to re-apply for the licence with more information to be contained therein.

Tullow's withdrawal from the upstream part of the project -- bringing the gas to shore from the ocean bed 140 kilometres off Namibia's coast -- was due to its wish to concentrate on other oil and gas projects.

The upstream part of the project will cost about $1.3-billion.

Construction of the Kudu power station will cost around another $1.3-billion.

Key Contracts and Suppliers
Kudu Gas Field Upstream Developers (project development agreement); Ernst & Young, Strategic International Advisory, DLA Piper and ESB International (transaction advisers); Shanghai Electric (preferred bidder); Siemens (generators and turbines); and Mitsubishi Hitachi Power Systems, Sumitomo and Posco Energy (reserve bidder).

On Budget and on Time?
Not stated.

Contact Details for Project Information
NamPower – Kudu project office, tel +264 61 205 2221, fax +264 61 205 9221 or email kudupower@nampower.com.na.