Namibia’s national power utility NamPower has agreed with Copperbelt Energy Corporation (CEC) in the development of the US$1.2 billion Kudu gas-to-power plant. CEC will take a 30% stake in the Kudu project near Oranjemund in south-western Namibia that will source gas from the Kudu field about 170 km offshore to a combined cycle gas power plant.

CEC firm will also buy up to 300 MW of electricity from the plant to supply mines in Zambia, Africa’s top copper producer. Nampower will source US$1 billion for the project while CEC is expected to contribute up to US$100 million. NamPower is looking for another equity partner to finance the remaining US$100 million.

The plant, which will have a total capacity of up to 1,050 MW when completed in 2017, will be connected to the Namibian and South African electricity grids for local and regional use.

Both the upstream and downstream Kudu gas related projects are expected to be operational by 2018. The gas fields were discovered in 1974 but have never been developed. The proven reserves are 1.3 trillion cubic feet of gas.

The Kudu power project, which has the potential of tripling NamPower’s generating capacity counts amongst the largest of the company’s future projects. The project gained momentum when NamPower and the National Petroleum Corporation of Namibia (NamCor) signed the Kudu Gas to Power Project Development Agreement (PDA) in 2013.

The PDA brings together the upstream (offshore development) and the downstream (power station development) to ensure that each aspect proceeds through engineering and design to a final investment decision in a coordinated manner.

The PDA also includes Gas Sales Agreement (GSA) heads of terms and provides the basis for further commercial negotiations pertaining to a final GSA following upstream completion of Front End Engineering and Design (FEED).

On signing the PDA, the upstream partners issued FEED invitations to tender for both sub-sea facilities and the Floating Production System and awarded a contract for an offshore survey of the field area and pipeline route. The FEED work will result in a refined cost estimate for the project, which is critical information to enable all stakeholders to make a final investment decision.

Of the upstream partners, NamCor has 54% equity interest in the production licence, together with partners Tullow Kudu Limited (31% operator) and CIECO Namibia (15%).