To save troubled Eskom: Sunbird Energy to supply gas to SA power utility

Sunbird gas project; Photo by THINKSTOCK

Sunbird gas project; Photo by THINKSTOCK

Sunbird Energy has agreed to supply gas to South Africa’s power company Eskom, the Australian-listed firm said on Wednesday, in line with the utility’s plan to use gas to run its generators rather than costly diesel. State-owned Eskom, which supplies about 95 percent of electricity to Africa’s most advanced economy, is battling to meet electricity demand and has to rely heavily on diesel-powered turbines to keep the lights on.

Sunbird said in a statement its Ibhubesi Gas Project (IGP) in South Africa would supply Eskom’s Ankerlig power station with 30 billion cubic feet of gas a year for up to 15 years. Ankerlig has an installed capacity of 1,350 megawatts and has used diesel since it was constructed in 2007.

IGP, a joint venture between Sunbird, a south African-focused gas explorer and South Africa’s national oil company, PetroSA, is South Africa’s largest undeveloped gas field. ‘The supply of Ibhubesi gas to Ankerlig will allow Eskom to realise significant fuel cost savings,’ said Sunbird.

The firm, which owns 76 percent of the IGP, said the deal will encourage further exploration and development of gas in the offshore Orange Basin, located 280km (168 miles) from Cape Town.

In February, President Jacob Zuma directed Eskom to switch to gas to cut down on the spiralling costs of using diesel.

Ibhubesi Gas Project

According to information on the Sunbird Energy web site, the IGP is South Africa’s largest undeveloped gas field, with 1P reserves of 210 BCF (SNY 76%: 159 BCF) and 2P reserves of 540 BCF (SNY 76%: 410 BCF). The Project is located 380km north of Cape Town in Block 2A, which is a Production Right that covers 5,000 km2.  The IGP is situated in the offshore Orange Basin, approx. 70 km off the coast in water depths of 250 metres.  The IGP is covered by 1,770 km2 of 3D seismic and many thousands of km of 2D seismic. Over US$125 million (R1.2 billion) has been spent on exploration and appraisal of the project since 2000.

Click here for Sunbird Energy announcement: Sunbird Enters Gas Sales Agreement Term Sheet with Eskom

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