Studies confirm viability of South African gas project

studiesINDEPENDENT studies have identified the Ibhubesi offshore project as a worthy development, as the South African market looks for new gas suppliers.
The project, which is a joint venture between Perth-based Sunbird Energy (76 per cent) and PetroSA (24 per cent), is 380km northwest of Cape Town and covers 5000 square kilometres, including the Ibhubesi gas discovery.
The studies confirmed that the project’s 1P reserves of 210 billion cubic feet of gas could support a Phase 1 development, and 2P reserves of 540bcf could underpin Phase 2 development.
According to a company statement, the 1P reserves were considered to be “of high certainty of recovery (P90)”, while 2P reserves represented “the most likely (P50) recoverable volume from existing discoveries and indicate significant potential for the Phase 2 project expansion”.
To date, the company reported that 7 of 11 drilled wells had encountered gas and Phase 1 could produce 40 million standard cubic feet of gas per day for 12 years, or 80mmscf/d for six years.
“The positive results from these independent studies of the Ibhubesi gas field demonstrate the commercial merits of a Phase 1 development and its ability to attract significant project financing and equity investment,” Sunbird managing director Will Barker said.
“This puts us in a strong position to advance gas sales negotiations and commit reserves for development.
“By continuing to meet major project milestones, Sunbird is unlocking the huge value of its existing reserves base.” The study revealed that gas from the project could be sold to two different customers: Eskom is looking to secure a gas supply from 2016 for its 1300MW Ankerlig power plant at Atlantis, 50km north of Cape Town; while South Africa’s Department of Energy is undertaking an initiative to increase its supply through procuring independent power producers, with 474MW of gas-to-power expected to be sourced in the fourth quarter of 2013.
Sunbird is now moving to the next stage of project development, preparing an integrated full-field development plan that will determine the final well designs, locations and scheduling, gas processing facilities, and the best export pipeline.
According to the company, a final investment decision would be made in the first half of 2015.