Page 8 - AfrElec Week 04 2021

AfrElec GAS-FIRED GENERATION AfrElec

BW Energy increases stake in

Kudu gas field

NAMIBIA BW Energy (Norway) has concluded a farm-in to BW Energy, the recently signed agreement
and carry agreement for Kudu, an offshore nat- will support that goal by “[enabling] gas sales
ural gas field, with the National Petroleum Cor- arrangements.”
poration of Namibia (NAMCOR). Immanuel Mulunga, the managing director
In a press release, BW Energy said that the of NAMCOR, said the development of Kudu
recently signed document would increase its would benefit his country. [“[This project] rep-
subsidiary BW Kudu’s stake in an offshore nat- resents an opportunity to reduce carbon emis-
ural gas-bearing field known as Kudu from 56% sions and strengthen energy independence for
to 95%. The deal also reserves the remaining 5% Namibia, which currently imports a major part
for NAMCOR and ensures that the state-owned of its electricity from coal-fired power plants out-
company will have the opportunity to increase side of the country,” he said. “I am confident this
its holdings to 10% after gas production begins, development will inspire increased exploration
it stated. initiatives in other licence areas in the country.”
BW Energy did not divulge all terms of the Carl K. Arnet, the CEO of BW Energy, also
agreement, but it reported that it had agreed to expressed optimism. “Kudu gas … has the
pay NAMCOR the sum of $4mn at the closing potential to provide a valuable contribution to
of the transaction. It also pledged to carry the Namibia’s energy mix and local value creation by
state-controlled firm’s share of development monetising stranded gas, which is an untapped
costs until gas production begins. natural resource in Namibia. The next step for
Additionally, the company indicated that the Kudu joint venture will be to secure long-
it intended to seek funding for gas production term commercial gas sales agreements, update
operations once the farm-in and carry transac- the development plan to meet off-take needs and
tion was completed. “The new arrangement ... ensure robust financial project returns.”
increases the likelihood of securing financing for Arnet also declared that the Kudu project had
the upstream Kudu development,” it said. positive implications for other projects. “Devel-
Kudu, which contains around 1.3 trillion oping Kudu will provide insights [that] can be
cubic feet (36.81bn cubic metres) of gas, was used to unlock similar abundant stranded gas
discovered in 1974 but has yet to be developed. reserves available around the world,” he said.
Namibian authorities hope to use future pro- “Adding cost-efficient gas to the energy mix of
duction from the field to reduce the country’s tomorrow is going to be vital to reach the world’s
reliance on imported electricity from coal- environmental targets.”™
fired thermal power plants (TPPs). According

P8 www. NEWSBASE .com Week 04 29•January•2021