The Southern African Development Community’s (SADC) Regional Gas Master Plan, which is expected to be adopted by the Heads of State when they meet in Windhoek later this month,
will give the long delayed Kudu Gas Project more options for joint development with other regional gas projects as well as market options outside Namibia, a gas expert said this week.
Project Manager of Gas at the NEPAD Business Foundation in Johannesburg, John Rocha, told the Windhoek Observer in an interview this week that the summit is expected to approve the development of priority gas projects in the region.
“I think the SADC process will add significant value towards the development of the project (Kudu). It will give Namibia answers on markets and a clear indication on how competitive Kudu is from a pricing perspective, to enable it to access those markets.”
Rocha said after the expected approval of the regional plan, a study will be conducted to determine the viability of gas projects in the region and which ones can be given priority for development. The study is expected to be completed in 12 months.
With South Africa planning to develop a gas pipeline from Mozambique to its economic hubs, Kudu could also be joined to the same pipeline.
“One of the reasons why the Kudu Gas has not moved in its implementation was the fact that there was no offtakes to purchase the gas. The SADC Gas Master Plan comes in handy to enable Kudu Gas to find and know other alternative markets for the power that it will generate.”
In April, the Windhoek Observer reported that Kudu Project Stakeholders have been forced to halve the Kudu Power Station after off-take agreements with Eskom from South Africa and Zambia’s Copperbelt Energy Corporation failed to materialize.
NamPower Chief Executive Officer, Simson Haulofu, told the Windhoek Observer at the time that the export agreements were one of the main reasons that had delayed the finalisation of the project as the two parties were taking forever to come to a financial close.
Instead of generating 885MW, the resized project will now be generating 442.5MW.
The power plant is now expected to cost an estimated N$9.4 billion, down from the previous estimate of N$15.6 billion.
Rocha said Namibia must take advantage of the advancement in gas technology and look at the options rather than developing a gas powered option only.
“Technology has advanced over the past 20 years ago. There is also small scale gas technology like small scale liquid gas technology. Namibia has options to go back to the drawing board and use small scale gas technology to strengthen its industry base.”
The SADC ministers of energy at a meeting held in Johannesburg in June signed a statement of intent on cooperation in the development of the regional gas market and infrastructure.
The meeting established a region-wide gas master plan in line with the principles of the Energy Protocol, as well as the overarching objectives of SADC Industrialisation Strategy Framework.