RUSSIAN giant Gazprom and Namibian state oil company Namcor have agreed to establish a special purpose company to take a majority stake in the Kudu gas field to accelerate its progress to first production in 2014. Alastair Baumann, Namcor’s upstream asset manager, told Upstream that the newly created company would take a 54% stake in the long-dormant Kudu field, though Tullow Oil would remain operator. However, he said Tullow’s stake would now fall from 70% to 31%, while the working interest held by Japan’s Itochu would drop from 20% to 15%. “We’re just finalising a joint operating agreement this week,” said Baumann. Tullow declined to comment.
As well as making a move into Namibia’s upstream, Gazprom is also expected to be heavily involved in the onshore pipeline that will take Kudu’s gas inland to a power plant at Oranjemund. This power plant, in which Gazprom will also be a key player, is expected to generate 800 megawatts of electricity. Some of the power, about 300 MW, will be sold to Namibian customers while a deal is understood to be close to completion to sell the plant’s remaining output to South African utility Eskom in a deal hastened by Gazprom. Eskom has been prevaricating for years about buying power generated from this proposed plant.
Kudu had originally been due on stream in 2010 as a long distance subsea tieback to shore but disagreements over tariffs and an inability to secure Eskom as a power purchaser meant the project was continually delayed. The revived project is expected to retain its subsea-to-shore development solution based on a 170-kilometre pipeline able to handle at least 100 million cubic feet of gas per day from the 1.3 trillion cubic feet of Kudu’s recoverable gas reserves.
