11 July 2014
Australian-listed company Sunbird Energy is pushing ahead with the development of the Ibhubesi gas project off South Africa’s west coast, which could pave the way for a multi-billion rand investment that would significantly boost the country’s gas-to-electricity generation capacity.
Last month, Sunbird announced that it had received all the necessary South African government approvals for its acquisition, from US company Forest Oil Corporation, of a 76% stake in Production Right Block 2A, which covers a 5 000 square kilometre area within the Orange Basin and contains the Ibhubesi gas project, South Africa’s largest undeveloped gas discovery.
This established Sunbird as the operator of the gas field, with South African state oil and gas company PetroSA holding the remaining 24% of the licence.
Block 2A is located 380 kilometres north-west of Cape Town and 70 kilometres off the coast of the Northern Cape province.
According to Sunbird, over US$125-million has been invested in exploring and appraising the block since 2000, with seven of 11 wells drilled to date discovering commercial volumes of gas. And in March, the company announced that an independent assessment had determined that the block contained estimated prospective gas resources of 7.8-trillion cubic feet.
In December, Sunbird signed a memorandum of understanding with South African state power company Eskom to jointly investigate supplying gas from Ibhubesi to Eskom’s 1 300 megawatt Ankerlig power station, to replace the plant’s current high-cost diesel feed stock.
Eskom is also currently developing plans to convert Ankerlig from an open cycle gas turbine to a closed cycle gas turbine plant, so that it can run on gas.
Sunbird managing director Will Barker said last month that South Africa’s energy market was both highly constrained and high value, “creating a unique opportunity for Sunbird as the most advanced project for the supply of energy for the domestic market.
“We look forward to progressing our gas sales negotiations with Eskom for the supply of gas to the existing Ankerlig Power station that is currently run on expensive diesel, and further exploring Block 2A’s upside potential.”
Barker said Sunbird was working to advance the project both technically and commercially, with upcoming milestones including completion of the preliminary field development plan, commencement of the front-end engineering and design studies, and progress on securing the necessary environmental approvals.