Today this morning, I have an important meeting with the British, and then later with our lawyers. Here is the pressing problem; perhaps for more than 13 years now, NamPower has been sitting around trying to develop a gas-fired electric generation station in Southern Namibia, and because of that, it has a pending Agreement with the developers of the Kudu gas field, which this field is not yet operational, because there’s no downstream customer for it.
But because of NamPower’s pending Agreement with them, it gives NamPower a sole and anti-competitive mandate that prevents other companies from having access to the Kudu gas field.
And here is a more issue. The Kudu gas field has more than 3 billion cubic feet of natural gas, or may be up to 13 billion, enough to easily provide efficient, safer and reliable natural gas for electricity production for Namibia for the next 30 years.
But NamPower has been sitting on this mandate for all these years, and when a Company like ours is coming in wanting to develop a larger power generation station that can be ready for operational by December 2014, and provide efficient, cost-effective, safer, and reliable electricity for the entire Namibia, then the developers of the Kudu gas field cannot look at signing another Agreement with another downstream customer like us because of the Agreement that NamPower has pending, unsigned, with them.
What we want is for NamPower to step back, and let us in, so they can simply focus on electricity transmission and distribution to Namibia and we do the work; produce electricity for NamPower. We have the money (financiers) and technical know-how, which NamPower doesn’t have yet, and we can develop this 900 MW gas fired Power generation sooner than what it has taken NamPower to do, more than 13 years now.
Also, there’s a land that we want in Uubvlei in Oranjemund for the development of this Power Station. This land has been allocated for the development of a power station, but again NamPower is just sitting on it, and no one else can have access to it.
This land is near the Kudu gas field and it’s economical viable for us to have this land for the development of our power plant. It costs more than US$1 million per Kilometer to build a gas pipe from the Kudu gas field which is about 170 Kilometers in the Atlantic ocean.
If we get a land in let’s say, Rosh Pinah for our power plant, Rosh Pinah is nearly 200 Kilometers to the Kudu gas field, so it will cost us more than US$200 million just to build a gas pipe, and by building this gas pipe from far away, it may not be safe to have a gas pipe laying stretching across the country, anything can happen to it.
My meeting with the British today this morning is to discuss about our need for them to disregard NamPower’s pending Agreement and consider signing with us. Also, my meeting with our lawyers today, and yes, we have some of the best lawyers in the country, is for them to review all these issues; the NamPower’s pending agreement with the developers of the Kudu gas field and the land in Uubvlei.
And if it comes to that point, we may have to go to court for these two issues.
The Kudu gas field is and has been un-operational. It does not currently produce natural gas. It is just laying there, from the beginning of time, the natural gas is just there, and here, Namibians don’t have adequate and cheaper electricity. We continue importing from elsewhere, when we have the gas laying around there doing nothing.
The developers of the Kudu gas field will not start to develop it until they have at least a guaranteed downstream agreement for the next 25 – 30 years. That means, if they sign an Agreement with us, it will take them at least 2 years to make the Kudu gas operational to supply us with a natural gas for our planned and ready for development 900 MW gas fired Power Plant.
You have seen NamPower’s electricity saving TV commercial in recent days. It is their plan to have that “sharing plan”, that during the peak zone, you should unplug your electric appliances and sometimes, your electricity may be turned off during non-peak hours to save electricity.
The NamPower Coal Plant in Northern Industrial costs more than N$1 million a day to run it. The NamPower hydro power plant in Ruacana, hydro electricity is one of the most expensive form of electricity generation. And, NamPower is not a profitable company in electricity, it doesn’t earn profit from its electricity business. Per each unit it imports, it loses nearly N$0.02.
Our plan is to develop this 900 MW gas fired electricity generation that will be more than enough for NamPower to supply reliable electricity to Namibia enough to power the whole of Namibia for the next 30 years and may be help make NamPower a profitable company.
All I want is for NamPower to step back from the development of their long-planned and waited 800 MW gas fired power plant, and let us do it. They have been trying to do this for more than 13 years now, and to date, they are far from getting it started.
We are ready, our engineers are ready and our financiers are ready, to develop and build this power generation and have it operational by December 2014, and that will make Namibia become self sufficient and never import electricity from anywhere else, ever.