South Africa pulls out of Namibia’s power plant deal
Posted by sociolingo on March 20, 2008
Source: APA
South Africa pulls out of Namibia’s power plant deal
Reports from South Africa said on Wednesday that the negotiations on the use of gas from the Kudu gas fields offshore Namibia had been grounded.
Tullow Oil, a United Kingdom listed oil and gas company, which is developing the Kudu offshore gas field in Namibia, is now in talks with Namibia to build a separate power station supplying Namibia alone, South Africa\’s “Business Report” said on Wednesday.
Progress on the 800 megawatt Kudu-gas-to power project has previously been bogged down by failure amongst the parties to reach a gas and electricity sales agreement.
Kevin Stallbom, Tullow business unit manager on the Kudu project, said that negotiations had stalled because of incompatible positions on foreign currency exposure, the price for gas and the schedule of supply.
Namibia, which does not have permanent power supply, had pinned its hopes of electricity supply self-sufficiency on the planned Kudu power plant.
Stallbom was quoted as saying that Tullow would try to reach a deal on the project which would “only be viable if NamPower (Namibia utility) is able to establish a market for 800 megawatts output.”
Namibia only consumes about 500 megawatts during peak periods.
Stallbom said that the other option would be to shut down the gas-to-power project and focus on an alternative gas export plan with similar local power generation adequate for Namibia\’s own needs.
Margaret van de Merwe, NamPower\’s Kudu project co-ordinator refused to comment on the future of the envisaged power plant.
LR/pm/APA 2008-03-20 
March 21, 2008 at 12:39 am
While we are not privy to the financial details of the arrangements under negotiation, it is somewhat distressing that Eskom has apparently turned a cold shoulder to a source of badly-needed capacity. Given the dire shape of the SA (and the southern continent’s) power grid, you would think every effort to increase capacity would be embraced. Continued failure to provide adequate power will only cripple the regional economy.
–Dave Donelson, author of Heart of Diamonds, a novel of the Congo