17 March 2015
Sunbird Energy, an Australian listed energy company, has signed deal under which it will supply gas to Eskom. South Africa’s national energy utility plans to use gas rather than costly diesel to power its generators.
The Ibhubesi Gas Project (IGP) would supply Eskom’s Ankerlig power station with 30 billion cubic feet of gas a year for up to 15 years, Sunbird said in a statement on Wednesday.
The Ibuhebesi development is off the West Coast of South Africa and is a joint venture between Sunbird (76%) and PetroSA (24%), the national oil company. Sunbird Energy, the operator of the project, received governmental approval to acquire the production right on Block 2A, 105km off the coast of the Northern Province within the Orange Basin, in October 2013.
By connecting South Africa’s largest proven gas field with Ankerlig, Ibuhebesi would allow Eskom “to realise significant fuel cost savings, while providing a new and cleaner burning energy supply to South Africa”, Kerwin Rana, Sunbird’s chairman, said.
The first gas out of the IGP and into the Ankerlig Power Station is expected in 2018.
Eskom supplies about 95% of the country’s electricity, but has had to use diesel- powered turbines as it struggles to meet demand. Ankerlig, which is about 40km north of Cape Town, has an installed capacity of 1 350MW and has used diesel since it was constructed in 2007.
The deal marked the commercialisation of IGP, Rana said, which would “provide a critical foundation project for the development of an integrated gas economy on the West Coast of South Africa”.
Rana said the development of the IGP were aligned with South Africa’s energy “war room” priorities of bringing energy security and reducing costs through the Five-Point Plan being overseen by Deputy President Cyril Ramaphosa.
The IGP project also supported the goals of Operation Phakisa, a presidential initiative aimed at unlocking the economic potential of South Africa’s oceans, with a particular focus on oil and gas development.