Kudu gas-to-power project not viable: Hangala

13 Nov 2014 14:50pm
WINDHOEK, 13 NOV (NAMPA) – Former NamPower Managing Director Leake Hangala said the much- talked-about Kudu gas-to-power project is not viable.
“It is a waste of time and money. Even those people who are spearheading the project know very well that the project is not viable,” he claimed during the one-day Namibian Energy Policy Forum in Windhoek on Thursday.
Hangala explained that the project will not be viable due to the current situation whereby a lot of gas was discovered recently in Mozambique and Tanzania, adding that investors will opt to approach those countries.
He said the Kudu gas-to-power project also does not have an operator after the United Kingdom (UK)-based Tullow Oil withdrew its participation.
South Africa’s Eskom has also not indicated any interest in buying electricity through the project, he stated.
The Kudu gas-to-power project is being spearheaded by the Ministry of Mines and Energy and the Namibia Power Corporation (NamPower).
Hangala said the project is not economically and financially viable, but would not elaborate on why he said so.
He charged that those who are spearheading the project are “not telling the leaders the truth”.
“It is time for those who are spearheading the project to report the reality of it to the leaders.
They should explore other alternatives to generate electricity, and leave the Kudu gas project out,” he stated.
Hangala said this in the presence of Mines and Energy Minister Isak Katali, current NamPower Managing Director Paulinus Shilamba and Minister of Trade and Industry Calle Schlettwein, amongst other participants.
Efforts to get comment from Katali or Shilamba proved futile as they were attending the forum.
Just last month, the government was informed by Tullow Oil that it was withdrawing its participation from the much-anticipated Kudu gas-to-power project.
Tullow and Itochu, a Japanese company, jointly owned 46 per cent of the shareholding in the Kudu gas project as upstream partners.
Tullow has informed the government that it will withdraw from the project due to financial problems within their company.
The Kudu gas-to-power project is set to increase power production in Namibia.
Late last month, the Namibian Government announced that it will avail N.dollars 4,3 billion to fund the 44 per cent share owned by the National Petroleum Corporation of Namibia (Namcor) in the project.
The main elements of the project are the development of the Kudu gas field and the construction of an 800 megawatt (MW) combined cycle natural gas-fired power station near Oranjemund in southern Namibia.
When completed, this power station will feed the Namibian, Zambian and South African power grids.
Hangala on Thursday also accused Government of ‘abusing’ NamPower.
“Government is putting a burden on NamPower, and now the company has a lot of projects amounting to billions. All these projects are still pending,” he stressed.
He thus called on Government to find other entities to share these responsibilities with NamPower.
Hangala, who recently rejoined the ruling Swapo-Party five years after quitting it, said NamPower is doing its best, but the burden is just too much.
The founder and executive chairman of the Hangala Group left the ruling party after the 2007 Swapo congress, saying he wanted to concentrate on business.
(NAMPA)
MMT/AS/TK