KUDU POWER PROJECT NAMIBIAS FLAG SHIP POWER GENERATION PROJECT 19 - - PowerPoint PPT Presentation

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KUDU POWER PROJECT NAMIBIAS FLAG SHIP POWER GENERATION PROJECT 19 - - PowerPoint PPT Presentation

Jan 17, 2023 33 likes •245 views

KUDU POWER PROJECT NAMIBIAS FLAG SHIP POWER GENERATION PROJECT 19 SEPTEMBER 2014 Background Kudu Gas Field was discovered in 1973 by Chevron, The first attempt to commercialize the Kudu gas resource for power generation was

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SLIDE 1

KUDU POWER PROJECT

“NAMIBIA’S FLAG SHIP POWER GENERATION PROJECT”

19 SEPTEMBER 2014

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SLIDE 2

Background

 Kudu Gas Field was discovered in 1973 by Chevron,  The first attempt to commercialize the Kudu gas resource for power generation was mooted shortly after independence.  A tripartite agreement between NamPower, Eskom and Shell Exploration & Production Namibia (SEPN) was signed in 1997 to develop a 750MW power station outside Oranjemund,  The project has since underwent several structural development changes and faced several delays mainly due to the complexity

  • f this project.
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SLIDE 3

 Power Station developers/partners:

NamPower 51% CEC Africa 30% Other Equity Partner: 19%

(still to be selected)

 Location of power plant: Uubvlei (25km north of Oranjemund)  Technology: CCGT  Power Output: 800MW (nominal)  Main Off-taker: NamPower  Secondary off-takers: Zambia & South Africa

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SLIDE 4

Upstream Namcor (54%) Tullow Oil (31%) ITOCHU (15%) Downstream 800 MW CCGT Power Station KuduPower (Pty) Ltd (NamPower + Partners) Gas Sales/Supply Agreement Power Purchase Agreements

NamPower

Domestic supply Power Export Agreements

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SLIDE 5

Project infrastructure scheme

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SLIDE 6

PROJECT COMMERCIAL STRUCTURE

Kudu Project Commercial Arrangements

NamPower & other equity partners Lenders

Shareholders Agreement Financing Agreements O&M Agreement

Operations and Maintenance Company OEM & EPC Contractor

EPC & LTSA Contract Gas Sales/Supply Agreement

Upstream Parties KuduPower NamPower

Power Purchase Agreement

Regional Buyers

Power Export Agreement Transmission Agreement(s) Power to Namibia

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SLIDE 7

KUDU REGIONAL COMPETITIVENESS

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SLIDE 8

REGIONAL COMPETITIVENESS

  • Kudu tariff (2013 estimates) of US$0.10 – 0.13c/kWh is still

competitive with any regional new build coming on-stream by 2016 - 2018,

  • CCGT technology is environmentally clean compared to

several planned regional new built that are largely coal- based,

  • It will possibly be the first CCGT power station of this size in

the region,

  • The economic spin-offs of Kudu is greater in terms of its

impact on the monetization of the gas resource in the region

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SLIDE 9

9

Indicative Regional Perspective of Pricing Trends

  • 2.00

4.00 6.00 8.00 10.00 12.00 14.00 USD cents/kWh

Average Electricity Price

2006 2007 2008

Forecast of Industrial Tariffs (2010 - 2020) 2 4 6 8 10 12 14 16 2 1 2 1 1 2 1 2 2 1 3 2 1 4 2 1 5 2 1 6 2 1 7 2 1 8 2 1 9 2 2 Year USc per kWh RSA Zambia

  • Low Tariffs but rising to

cost reflectivity

  • Annual increases of 20-

30%

  • Driven by new

investments needed to meet growing demand

Source Copperbelt Energy Corporation: 2011

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SLIDE 10

LATEST PROJECT UPDATE

(AS AT SEPTEMBER 2014)

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SLIDE 11

JOINT DEVELOPMENT AGREEMENT (JDA)

  • NamPower signed a JDA with CEC Africa in February 2014,
  • A JDA Steering Committee consisting of NamPower, CEC

Africa and KuduPower has been established.

  • KuduPower Board composition is being finalized,
  • The third additional equity partner also expected to sign the

JDA, and will nominate its representatives to sit on the Steering Committee.

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SLIDE 12

UPDATE ON POWER EXPORT AGREEMENTS

Power Export Agreements (PXA) negotiations:

  • Negotiations with CEC Plc:

 PXA Termsheet with CEC Plc signed in February 2014,  Full PXA negotiations expected to commence in due course,  CEC Plc committed to off-take about 300MW denominated in US$

  • Negotiations with Eskom

 Eskom has been offered 100 - 300MW (denominated in Rands with hedging). Full negotiations have not yet commenced.  Transmission interconnection discussions between NamPower and Eskom are quite advanced.

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SLIDE 13

UPDATE ON KUDU TENDERS:

Tender evaluation process:

  • EPC
  • preferred contractor selected
  • MLA
  • preferred bank selected
  • Strategic Equity Partner-

tender evaluation completed

  • Operation & Maintenance-

tender evaluation completed

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SLIDE 14

KUDU PROJECT RISKS

Kudu Power Station Fuel Transmission Construction O&M Demand Forex Force Majeure Regulation

  • +/- 0.2 B USD

required

  • Substantial GRN

support required

  • Supply
  • Long term commitment
  • Delays
  • Costs
  • Disasters
  • Strikes
  • GRN action
  • New taxes
  • Frequency
  • Time
  • Costs
  • Volatility
  • Trend
  • Demand
  • Exports:
  • Volume
  • Price
  • Delay
  • Availability
  • Cost reflectivity
  • PPA pass through

Debt NP Equity Minority Equity

Financial

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SLIDE 15

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MAJOR PROJECT RISKS

The following are the major risks that have been identified:

  • Foreign exchange exposure
  • Construction time delays and costs
  • NamPower’s export agreements for surplus power from

Kudu

  • Gas price
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SLIDE 16

THE ROLE OF GOVERNMENT

  • NamPower's experience (along with other utilities in the

region) is that major power projects are unlikely to move quickly without a substantial commitment from governments.

  • The Kudu Gas to Power Project is a complex and big project

which its commercial viability also depends largely on support from the Namibian Government in terms

  • f

guarantees to Namcor and NamPower in particular as lead developers.

  • In the absence of the project receiving timely Government

guarantees, the project is most likely to be further delayed.

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SLIDE 17
  • Political stability let to higher economic growth and

subsequently an increase in electricity demand,

  • Namibia is still largely dependent on imports,
  • Security of power supply still at risk,
  • Surplus generation capacity in the region on the decline,
  • There is considerable peak power demand challenges in the

region,

  • Transmission congestion for imports still a huge challenge
  • Monetising the stranded Kudu gas field will unlock &

stimulate further oil & gas exploration.

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SLIDE 18
  • It will provide secure and adequate generation supply,
  • It will diversify Namibia’s energy mix,
  • It will reduce the over dependence on imports,
  • It will make Namibia to be a net exporter of electricity,
  • It is one of the most efficient non-renewable electricity

generation option,

  • It is environmental friendly with lower carbon emissions,
  • It could generate carbon credit revenue
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SLIDE 19

DIRECT & INDIRECT IMPACT FOR LUDERITZ & ORANJEMUND There are several socio-economic benefits:

  • Employment
  • Housing/accommodation
  • Infrastructure expansion & upgrade (e.g. roads)
  • Increased utilization of harbour facilities at Lüderitz
  • Secondary industries that will benefit:

 Tourism  Cleaning services, Catering, Trade, Transportation, Maintenance, etc.

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SLIDE 20

INDICATIVE PROJECT TIMELINES

  • Conclusion of all agreements

Nov 2014

  • Financial Close:

1st quarter 2015

  • Commencement of construction: 1st quarter of 2015
  • Commercial Operations Date (COD): 1st quarter 2018
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SLIDE 21

For more info contact: The Kudu Project Office

  • Tel. +264-61-205 2221
  • Tel. +264-61-205 2214

Fax: +264-61-205 9221 E-mail: kudupower@nampower.com.na

For attention: Mr. S. Muyenga-Muyenga

Project Coordinator: Stakeholder Management & Project Promotion E-mail: muyenga.muyenga@nampower.com.na Website: www.nampower.com.na