Inside Namcor’s new Kudu deal

BW Cidade de Sao Vicente With Flare Tower

Edgar Brandt

Windhoek-The much anticipated 885 megawatt Kudu Gas Project, which holds the potential to make Namibia self-reliant in terms of electricity generation, has been given a new lease on life.

This comes after the National Petroleum Corporation of Namibia (Namcor) this week confirmed an investment from BW Kudu Limited, which is a wholly-owned subsidiary of BW Offshore Singapore Pty. Ltd.

BW Offshore is a joint Norwegian/Singaporean owned company and is one of the world’s leading suppliers and operators of offshore floating production systems with extensive experience in the development of offshore fields.

In terms of the investment Namcor granted a 56 percent interest in the offshore gas field to BW Kudu Limited.

“Currently Namcor has a 100 percent of the license which was issued to us. We have transferred 56 percent to BW Kudu and we will now be joint holders of the license where each party will pay a pro rata share of the cost going forward. Forty-four percent is paid by Namcor and 56 percent will be paid by BW offshore,” explained Namcor spokesperson, Nangombe Negumbo.

In terms of the agreement, BW Kudu is required to reinvest in Namcor as part of the transfer of the 56 percent stake.

This is to cover costs incurred by Namcor since the commencement of the current license. However, Negumbo said he was not at liberty to disclose the value of the agreement as it is a commercial transaction.

Negumbo added that the field development of the project, which includes the drilling of production wells, the construction of sub-sea and gas transmission pipelines and the installation of a Floating Production System (FPS), is expected to be completed in about three years.

This means the projected completion of the project will be three years after the Final Investment Decision (FID) has been taken. The FID is planned for the fourth quarter of 2017.

Preliminary estimates are that the entire project could be completed towards the end of 2020.

A full page advert in local newspapers this week indicated that Namcor has agreed to transfer the role of field operator to BW Kudu. The Namibian company said it will work closely together with BW Kudu within a joint development team as the field is prepared for the FID and the subsequent field development.

Once completed, the Kudu gas-to-power project will decrease reliance on imported power and should accelerate economic development.

The project involves the development of the offshore gas field to deliver gas through a 170km-long pipeline to a power station to be built at Uubvlei, 25 km north-east of Oranjemund.

The station will be connected to the Namibian and South African electricity grids by new transmission lines.

“Kudu represents another opportunity for BW Kudu to take a proactive development role in a project that will produce for 15 to 25 years,” said BW Offshore’s chief executive officer, Carl Arnet.

Falling development costs after the 2014 drop in oil prices has helped in making the project economically feasible. The electricity generated by the power station will reshape electricity supply in south-western Africa, providing a secure long-term supply to support the development of Namibia and potentially neighbouring countries.”

“We welcome BW Kudu to the Kudu project and look forward to working together with them to progress the project, which will ultimately generate significant benefits including employment, power generation and economic development for the people of Namibia,” said Namcor Managing Director Immanuel Mulunga.

BW Offshore has about 80 years of maritime energy history and is a leading global provider of floating production services to the oil and gas industry.

BW Offshore has a fleet of 14 owned floating production storage and offloading (FPSO) vessels and one floating storage and offloading (FSO) vessel. BW Offshore has executed 38 FPSO and FSO projects and is listed on the Oslo Stock Exchange.


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