Australian gas explorer and developer Sunbird Energy has signed a Gas Sales Agreement (GSA) term sheet this week with state-owned utility Eskom to supply a power station with gas to run its generators in a bid to reduce spending on diesel fuel.
Sunbird said on Wednesday that it’s South African Ibhubesi Gas Project (IGP) will be supplying Eskom’s Ankerlig power station with 30 billion cubic feet every year for 15 years.
The gas project is a joint partnership between Southern African focused Sunbird (76%) and South Africa’s national oil company PetroSA (24%).
Benefits of the gas sales agreement
Sunbird commented: “Sign off of the Gas Sales Agreement (GSA) Term Sheet demonstrates Eskom’s commitment to the IGP and achieves a significant milestone on the path to development of Ibhubesi by connecting South Africa’s largest proven gas field with a gas market at the Ankerlig Power Station.
Sunbird continued: “The supply of Ibhubesi gas to Ankerlig will allow Eskom to realise significant fuel cost savings, while providing a new and cleaner burning energy supply to South Africa.”
Sunbird claims that the GSA will stimulate additional exploration and development of gas in the offshore Orange Basin, 280km from Cape Town.
Sunbird’s Chairman, Kerwin Rana said that: “the commercialisation of IGP will provide a critical foundation project for the development of an integrated gas economy on the West Coast of South Africa.”
The project will feature, offshore petroleum exploration and development, upstream/offshore domestic oil and gas production, midstream pipeline infrastructure, liquefied natural gas importation and gasification of onshore power generation and industry.
In addition the project will include, diesel replacement in existing power stations, new build gas fired Independent Power Plants and fuel replacement for major industrial users.