06-06-01 US exploration and production company Forest Oil has announced that test wells drilled in the Ibhubesi field off South Africa's west coast indicate deposits of sufficient natural gas reserves to justify the development of a domestic gas market. Three of the four wells drilled were successful and, together with the initial discovery well, AK1, produced at a rate of 177 mm cf of gas and 1900 bpd of condensate.
Preliminary development and pipeline feasibility studies have been completed, which Forest said identified gas markets with the potential to use between 30 mm and 200-mm cfpd of gas. Forest operates the Ibhubesi field with a 70 % working interest, while Anschutz and black empowerment company Mvelaphanda own the rest.
The announcement is significant because the Cape Power Project, a proposed combined-cycle, gas-turbine power station of between 1200 MW and 2000 MW intended for Cape Town, is at a critical stage in the process that could lead to the commissioning of the R 4 bn plant. Initial technical, environmental and economic reports have all given the project the thumbs-up.

In the absence of dependable natural gas supplies in South Africa, the assumption has been that the plant would be fuelled by gas from the Kudu field off the coast of Namibia, which is owned by Shell and Energy Africa. Building the pipeline and power station would take up to three years, and time has to be allowed for financing to be arranged and licences to be issued. This means key decisions on the future of the Cape Power project will have to be made within the next few months if the window of opportunity is not to be missed.
Cape Power Project manager Peter Lever said the Ibhubesi discovery introduced the possibility of another source of gas for the power plant and competition for the supply contract, which would help keep costs down. However, the Ibhubesi reserves were not yet proven, and project finance for the power station and pipeline would not be forthcoming until the supply had been independently audited. Forest said the next step would be to obtain third-party verification of the Ibhubesi reserve, after which commercial agreements could be negotiated to sell and deliver gas.