With Green Hydrogen peddled as the answer to so many of Namibia’s woes, including energy dependency, job creation and economic growth, the future of the country’s only proven hydrocarbon deposit, Kudu Gas, has been questioned.
However, BW Kudu Limited, the local company charged with the development of the gas field offshore Namibia, yesterday said the two projects can coexist and actually complement each other.
In fact, if all necessary pieces fall into place, then the first electricity from Kudu Gas could be produced as soon as 2025.
During an exclusive interview yesterday with New Era, general manager of BW Kudu Limited Klaus Endresen exclaimed, “the future of Kudu Gas is great”.
He explained that during the last two years, the Kudu Gas project has been redesigned and now encompasses alternative solutions for the pipeline to carry the gas onshore as well as for the power station.
“The investment costs in the redesigned project are significantly lower, about 30%, but we are still talking about capital expenditure well in excess of US$1 billion. And, because the initial investment is lower, the price of the gas will also reduce by 30%, meaning the electricity price will also be lower,” Endresen said.
Describing the Kudu Gas project, which has significant proven gas reserves, Endresen called it a tangible project that targets the Namibian markets and beyond for electricity supply. When fully developed, the Kudu project is expected to wean Namibia off its dependence on imported power from its neighbours, which in July 2021 stood at about 84%, with only about 16% of the electricity consumed in the country generated domestically.
Now, Endresen stated, the focus is on confirming offtake agreements from potential customers.
“We see the potential market for Kudu Gas in the region, but the priority is the Namibian market,” Endresen stated.
Moreover, he called Kudu Gas “the best friend” of renewable options such as solar and wind.
This, he explained, is because Kudu Gas electricity can support solar and wind options to improve the stability and reliability of the country’s overall supply of electricity.
Endresen added that in many parts of the world, natural gas is seen as the ideal transition fuel from coal as countries strive to reduce their CO2 emissions.
For this reason, the global demand for natural gas is steadily increasing as nations endeavour to lower their carbon emissions in line with United Nations targets as stipulated at the recent COP26 in Glasgow, Scotland.
Part of the reason for the attractiveness of natural gas is that it produces about half the carbon emissions of coal.
Moreover, according to the deputy mines and energy minister, Kornelia Shilunga, Namibia’s oil and natural gas resources remain crucial to its socio-economic development. Shilunga said this at the 23rd Africa Energy Forum in London this week.
“Given that natural gas will play a major role as the world transitions from carbon-based energy resources to renewable resources, the development of the indigenous natural gas is crucial to Namibia and the SADC region to secure affordable and reliable electricity while safeguarding our environment. Therefore, the Kudu Gas Field development offers a great investment opportunity in the Namibian energy sector,” said Shilunga.