10 April 2013 – NamPower has issued the pre-qualification tender for the engineering, procurement and construction (EPC) of the 800 MW Kudu power station. EPC tender negotiations with a successful bidder are expected to be finalised towards the end of this year.

Power export agreement negotiations with secondary off-takers Eskom and the Copperbelt Energy Corporation (CEC) of Zambia, are on-going. CEC has started negotiations with NamPower for possible equity participation in the Kudu power station, in addition to its intent to off-take power from the power station. Kudu is expected to come on-stream in 2017.

NamPower currently holds a 100% equity interest in Kudu Power Company (Kudu Power), a company established to design, build and own the Kudu power station at Uubvlei, 25 km north of Oranjemund. NamPower intends to reduce its equity in Kudu Power with the introduction of strategic partners. NamPower will be the sole buyer of electricity from Kudu Power and will enter into power export agreements for the sale of electricity that is surplus to Namibian requirements.

Namcor has 54% equity interest in production licence 003, together with partners Tullow Kudu (31%) which is the operator and CIECO Namibia (15%). The 4,567 km2 licence area includes the Kudu gas field located 130 km off shore the south-west coast of Namibia. Current focus is on defining the Kudu gas field development, which could be followed by further exploration in the licence area for additional gas, and potentially oil resources.

Key to the going ahead of the project is that NamPower and Namcor have signing the Kudu Gas power project development agreement (PDA). The agreement brings together the upstream development and the power station development to ensure that both proceed through engineering and design to a final investment decision.

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 subsea facilities and the floating production system, and also 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.