Eskom Holdings SOC Ltd., South Africa’s state-owned electricity utility, and Sunbird Energy Ltd. (SNY) signed an agreement to study supplying gas from the explorer’s offshore project for a power plant.
The parties “have agreed to jointly investigate the economic and commercial viability of the development of the Ibhubesi gas field,” located off South Africa’s west coast, for use at the 1,350-megawatt Ankerlig plant, about 40 kilometers (25 miles) north of Cape Town, Sunbird said in a statement.
While Eskom generates most power from coal, it has been running open-cycle turbines that run on costlier diesel to meet demand. The utility declared an emergency last month, asking customers to reduce electricity consumption, as the risk of scheduled blackouts in the country rose to the highest level since 2008.
A working group including both parties will be established, while Sunbird is to complete the field development plan and engineering study for Ibhubesi, South Africa’s largest undeveloped gas field, according to the statement.
Eskom is planning to replace diesel feedstock with natural gas at the station as well as converting its open cycle turbines to more efficient closed cycle turbines, Sunbird said.
A natural-gas resource creates energy security, “but we’re also putting that first critical piece of infrastructure in the pipeline,” Sunbird Managing Director Will Barker said in a telephone interview. “That encourages other explorers and developers to create a new industry on the west coast.”
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