Namibia's Kudu gas-to-power project faces further delays, sources say

BW Energy has postponed the final investment decision (FID) on its long-delayed Kudu gas-to-power project in Namibia to 2025, two company sources said on Thursday.

"It is true, we have delayed FID," said one source without elaborating. Both sources declined to be named as they were not authorised to speak to the media.

BW Energy did not immediately respond to a request for comment.

BW Energy previously told Reuters the FID was expected by September this year, with the first gas anticipated 30 to 40 months thereafter.

Idle

Seen as vital to boosting electricity security in the southern African country, as well as the broader region, the Kudu gas-to-power project has struggled to get off the ground for years, mainly due to cost and technical complexity.

With proven reserves of around 1.3 trillion cubic feet of gas the Kudu offshore field has stood idle since being discovered by Chevron in 1974, some 130 kilometres from the nearest land, close to Lüderitz port.

Oslo-based BW Energy is aiming for an 800 megawatt plant with an initial phase of 420 MW, with roughly half the power destined for Namibia and the remainder to supply regional markets.

The second phase would be built based on "huge appetite" for Kudu's power from South Africa, BW Energy said in June, adding that some firms are also looking for natural gas and LNG to displace diesel, "which we are keen to provide as soon as we can confirm additional gas resources."

BW Energy intends using a repurposed semi-submersible drilling rig as a floating production unit in a bid to reduce costs and accelerate the development, which includes a pipeline, power plant, transmission line and LNG facility.