US provides support for S/Africa’s Ibhubesi gas field development

Gas project26 August 2013, Johannesburg – In an effort to support South Africa’s transition to clean energy, the U.S. Trade and Development Agency, USTDA, signed a grant of $700,000 to Sunbird Energy Ltd (South Africa) to fund a sub-surface development plan for the Ibhubesi Offshore Gas Project.

This plan will be integrated with a full field development plan being commissioned by Sunbird Energy to define the project engineering requirements and complete an environmental impact assessment and commercial analysis for the project.

The study includes construction of a detailed 3D gas reservoir model, assessment of production flow rates, identification of preferred drilling locations, and well design to maximize production against cost and integration with the facilities development plan.

On Friday, August 23, the U.S. Embassy Chargé d’Affaires Catherine Hill-Herndon and Sunbird Energy Chairman Kerwin Rana signed the grant, with PetroSA Acting Vice President: New Ventures Upstream Andrew Dippenaar witnessing.

“This project supports both President Obama’s Climate Action Plan and South Africa’s Integrated Resource Plan 2010, which calls for the expansion of gas-fired power generation from 2% to 11% of the total supply by 2030,” said Charge d’Affaires Hill-Herndon. “South Africa’s transition to clean energy is critically important.”

“Sunbird is delighted to have secured U.S. Government support for the advancement of the Ibhubesi Gas Project,” said Sunbird Energy Managing Director Will Barker.

“It is a very strong validation of the regional importance of Ibhubesi to the South African energy equation. As Ibhubesi is the largest undeveloped gas field in South Africa, its proven reserves can replace high-cost imported diesel and help meet the significant demand for gas-fired power generation.”

The project will support local industry development and employment, including support for the plans for an industrial development zone at Saldhana that will cater for the offshore oil/gas sector. Combined with the potential of building liquefied natural gas, LNG, receiving and regasification capabilities at Saldhana Bay, the region could become a major gas hub for South Africa.

This project is included in the South African government’s Presidential Infrastructure Coordinating Commission’s Strategic Integrated Project #5, and could deliver 20-40 billion ZAR of foreign direct investment (with 1 billion ZAR already invested). 500-2,000MW of cleaner electricity is anticipated through this project commencing from 2017 for 15+ years.

An independent resource assessment completed in June 2013 confirmed that the Ibhubesi reserve is capable of producing 225 million cubic feet per day (equivalent to 30-40% of the current energy use in South Africa’s Western Cape Province).

USTDA is a U.S. foreign assistance agency operating with an office in the U.S. Consulate in Johannesburg, South Africa. It funds project planning activities, pilot projects, conferences, and study tours in support of partner countries’ sustainable infrastructure development and economic growth priorities.

USTDA is a partner agency with the Overseas Private Investment Corporation, OPIC, and the Export-Import Bank of the United States (Ex-Im Bank) in the recently-established US-Africa Clean Energy Development and Finance Centre in Johannesburg.

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