Kudu Gas Project viable: Katali

13 Mar 2015 08:10am
WINDHOEK, 13 MAR (NAMPA) – Outgoing Mines and Energy Minister Isak Katali strongly believes that the much-anticipated Kudu Gas Project is a feasible plan and remains a flagship of the country.
In an exclusive interview with Nampa on Wednesday, Katali said the World Bank and the Africa Development Bank (ADB) have expressed the viability of the project, adding it was also strengthened by a support package presented by Minister of Finance Saara Kuugongelwa-Amadhila in National Assembly on Tuesday.
Katali did not specify what support package Kuugongelwa-Amadhila presented in Parliament and attempts to obtain more details from her office proved futile.
Thus, the Minister valued these measures as paving ways for the full implementation of the much-talked Kudu Gas Project very soon.
“As I have been saying, this project should fail with me or succeed with me. It is true this project has succeeded with me. I am leaving the ministry knowing that I have achieved one big project,” Katali said.
National Petroleum Corporation of Namibia (Namcor) has 44 per cent equity in Production Licence 003, together with partners, United Kingdom-based firm Tullow Kudu Limited as an operator with 46 per cent stake and CIECO-Namibia has 10 per cent shareholding.
In April this year, a Japanese oil company, Itochu Corporation, bought a 20 per cent stake in Britain's Tullow Oil which was estimated at the cost of N.dollars 315 million (US.dollars 44 million).
In November 2014, a Tullow withdrew its participation from the much-anticipated Kudu gas-to-power project.
The minister expressed disappointment that Tullow withdrew its interest in the construction of the project at the last minute when discussions were about to complete.
He, however, said the Itochu Corporation have not made up their mind if they will withdraw or remain as was contracted by Tullow that was an operator.
Katali said during his visit to London in December 2014, he met three companies that have shown interest to take over the shareholding and they are busy finalising the process of awarding the tender to one of them.
The minister, however, said he is not in the position to reveal the names of these three interested London-based companies as discussions are still at the infant stage.
During the recent NamPower Equitable Economic Policy (NEEEP) information session, NamPower Managing Director Paulinus Shilamba said there is no Namibian company with the capability to construct the Kudu gas-to-power project and thus if the tender is not awarded to a Namibian contractor, they will make sure that 10 per cent of the investment goes to Namibian companies through sub-contracting.
The tender process for the awarding of a third party in the construction of the power station started last May and has not been awarded yet.
The project is estimated to cost about US.dollars 1.2 billion (N.dollars 14.8 billion), and aims to increase power-generation in Namibia.
Construction is estimated to commence in the first quarter of 2015, while the successful implementation and commissioning is scheduled for the end of 2017 - latest in the first quarter of 2018.
Upon completion, it will be the first large power station to have been developed in Namibia by the Namibian government.
NamPower will take up 400 MW to be consumed in the country, while 100 MW will go to South Africa and 300 MW to Zambia.
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.