Poised to start production in 2026, the Kudu Conventional Gas Development in Namibia’s Orange Basin could transform the country into a major regional gas exporter. According to Namibia’s national oil company NAMCOR, the development holds an estimated 1.3 trillion cubic feet (tcf) of natural gas, unlocking a windfall of potential revenue for the government and new energy supplies for the Southern African Development Community (SADC).
Meanwhile, a series of significant hydrocarbon discoveries in the deepwater section of the Orange Basin by energy supermajors TotalEnergies and Shell have raised gas estimates to up to 8.7 tcf. If proven commercially viable, these finds have the potential to more than double Namibia’s GDP by 2040. Insights into Namibia’s path to becoming an integrated gas producer will be shared at this year’s Namibia International Energy Conference (NIEC), taking place in Windhoek on April 23-25.
Commercializing Kudu Gas
Last November, the Namibian Government tapped TotalEnergies and Shell to work closely with Kudu Conventional Gas Development operator BW Energy on a joint development plan for the massive volumes of natural gas in place. The joint development plan will unite the technical capabilities of both supermajors and BW Energy to optimize the extraction and utilization of the field’s 1.3 tcf of natural gas.
The development – representing an $800-million investment – is currently in its Front-End Engineering and Design phase and is expected to reach a Final Investment Decision sometime in 2024. BW Energy acquired additional 2D seismic data in 2022 and is currently reviewing geophysical and well data from previous exploration activities to further identify additional exploration targets. The operator has also acquired the West Leo, a semi-submersible rig, from offshore drilling company Aquadrill, which is targeted for use as a production unit at the Kudu gas field. Development of the field will involve the drilling of three wells and the use of a floating production unit and subsea trees. Production is forecast to peak in 2031 and will continue until the field reaches its economic limit in 2047.
Supplying Gas to the Region
Namibia’s proven gas reserves pave the way for the country to produce LNG as a clean energy source for domestic use and export to the wider SADC region. Viewed as an intermediate fuel within the energy transition, natural gas from the Kudu field is set to be transported through a 170-km pipeline to a 885 MW combined-cycle gas turbine in Uubvlei, southern Namibia, where it will be processed for domestic use and exported to international markets.
Poised to draw much-needed revenue to the country’s economy, electricity generated from the combined-cycle plant will contribute to exports of between 10,000 and 48,000 MWh to neighboring countries. This electricity will serve to diversify the region’s energy mix, while increasing reliability of the electric grid in the SADC.
Namibia has several Power Purchas Agreements in place with utilities in Zambia and South Africa, through which the country will help alleviate loadshedding while reducing the energy deficit in the Southern African Power Pool. A meeting between Namibia’s Minister of Mines and Energy Tom Alweendo and South Africa’s Minister of Electricity Dr. Kgosientsho Ramokgoba last August explored how the two countries can mutually benefit from natural gas from the Kudu development.
Attracting Investment Following New Discoveries
A series of oil and gas discoveries made by Shell, TotalEnergies and Galp between 2022 and 2024 have resulted in a major exploration blitz in the country. This exploration campaign has attracted the interest of supermajors including Chevron and ExxonMobil, as well as multinational energy corporations like QatarEnergy and a range of independent explorers.
Namibia’s success gives hope that further exploration in the Orange Basin – where license areas are shared between Namibia and South Africa – may yield similar results. Last March, TotalEnergies and QatarEnergy acquired participating interests in Block 3B/4B, where the companies will attempt to mimic Namibia’s success in South Africa’s offshore.
As such, gas from Namibia is poised to stimulate the country’s socioeconomic development and further investment in exploration and production activities. The export of surplus electricity from the combined cycle gas-to-power project is expected to catalyze economic growth across southern Africa, while driving the development and usage of sustainable and reliable energy sources within the region.
Energy Capital & Power is a strategic partner of the Namibia International Energy Conference (NIEC) – taking place in Windhoek on April 23-25, 2024. The 6th annual conference unites industry leaders, business executives and policymakers to engage in dialogue, exchange ideas, create new partnerships and identify strategies to foster a prosperous energy industry in Namibia and beyond. For more information, please visit https://www.nieconference.com/.
