Kudu Gas Project has massive potential

Jun 01, 2005 02:00 AM

The planned multibillion-dollar Kudu Gas Project near Oranjemund has enormous potential to satiate both local power demands as well as to generate enough power to meet a percentage of the projected electricity deficit in the sub-region once it is operational.
Located some 170 km off the Namibian coast from the southern town of Oranjemund, the highly ambitious project is expected to cost some N$ 7 bn. The Kudu Gas fields have proven gas reserves of a staggering 1,3 tcf.

Upon construction at the end of next year and the planned commissioning in 2009, the Kudu Gas development initiative is positively expected to give Namibia an edge when it comes to having one of the latest gas technology systems in Africa.
Upon completion the project is expected to generate 800 MW of electricity, that far exceeds the country's current consumption of 500 MW. Furthermore, it is foreseen that it would have the potential to export surplus power to neighbouring African countries.

Expressing these sentiments,the managing director of NamPower Dr Leake Hangala told that this scheme would provide a tremendous injection into the country's economy, while at the same time provide employment to close to 2,000 Namibians during the construction phase.
"It will kick-start the economy and GDP and it is therefore seen as a means to an end where Namibia can bring in new technologies and new faces in the industry," he said.

Although the contract with ESCOM, the South African utility from where Nam-Power imports power to meet the deficit is expiring by 2007, NamPower says it is currently re-negotiating a new commercial undertaking with that entity. Sentiments have been that time has come for Namibia to become a viable player when it comes to distribution and exporting surplus electricity to other African countries in need. This process has even become more critical at a time when Southern Africa is expected to experience crippling power deficits due to the growing domestic and industrial demand.
"Our economy is growing and one needs power supply that can grease and fuel the machines of our economy. The GDP grows then our economy grows and investors love that," explained the NamPower CEO.

The government has already made the Kudu Gas initiative a national priority that would ultimately drive the economy. The project, which will be commissioned by 2009, will help alleviate imminent power shortages likely to be experienced by 2007 when the power demand in the Southern African Power Pool is expected to surpass the generation capacity if no new electricity generating resources are built soon.
Namibia currently imports more than half of its energy needs from South Africa through a bilateral power purchase agreement signed in 1998. The Kudu Gas Project is therefore crucial to NamPower and Namibia as a whole to ensure a steady power supply and to reduce dependence on costly imports. All that remains now is for Namibia to lure both local and international investors into the Kudu Gas Project that bodes well not only forNamibia, but the region as a whole.

Another potentially viable project cited by Dr Hangala is the N$ 1,5 bn "Caprivi Link". Currently, there is a lot of power north of Namibia from African countries such as Angola, Zambia, Mozambique and the Democratic Republic of the Congo (DRC).
"We want to build a line to Katima and Tsumeb from Zambia's ZESCO system and this will be connected to NamPower," he added. This is another step in which regional African countries can integrate with each other as they challenge the shortage of electricity in the region.

On other power schemes underway in the country, the N$ 600-mm Epupa Project is still in the pipeline, as the two governments of Namibia and Angola have not reached consensus on the way forward. It is still regarded as an expensive and emotional issue over the shared water resources and cross border initiative.
"Angola was still trying to overcome its domestic political issues and could now possibly be looking at developmental issues like Epupa," he said.

The two authorities also met in February this year to develop a hydropower station. Although hydropower is capital intensive, this could be offset by running costs that are much cheaper in the long run. However, the fact of the matter remains that as such projects get underway, the prices of electricity go up due to the competitive market environment.
"Unfortunately, the way electricity is generated is not cheap. A lot of investment goes into technology. The equipment has to be imported and we cannot control the price of generators for instance," said Dr Hangala.

With the ever-growing shortage of electricity in the region, Namibia has to be ready for any eventualities and projects are the right way to go.
This was the general feeling expressed at the Presidential Summit held in Mauritius in an effort to ensure that Africa avoids this critical shortage in the near future. Furthermore a Regional Electricity Investment Conference called by the SADC Energy Ministers will be held on the same issue in September this year.

Source: Africa News
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