POWER SUPPLY: Gassy Plans For Cape's Energy
Recent Western Cape Business News
DURING the past couple of weeks various ideas have been floated which aim for the Cape to make better use of the pockets of gas found around the province. These range from deposits found offshore to electricity generation using methane gas generated in Cape Town’s landfill sites.
Last month Gigajoule Africa said it can supply the Cape West Coast with clean burning, environmental friendly natural gas as early as 2014.
Johan de Vos, MD of Gigajoule Africa, says the company has submitted a license application to the National Energy Regulator of South Africa (Nersa) for the supply, transmission, distribution and trading of gas in the region.
De Vos points out that an intensive market study conducted over a two-year period since 2007 revealed that there is sufficient interest from the industrial, commercial, transport and power generation sectors in the Cape West Coast region to switch to natural gas, should it become available. “
Two supply options are being considered: the sourcing of Marine Compressed Natural Gas (CNG) from the proven Kudu gas field, where the operator Tullow Oil and the Kudu field partners are currently evaluating a development scheme for transporting the gas by marine CNG vessel to an offshore delivery point along the West Coast. The second supply option is to obtain Liquefied Natural Gas (LNG) from international LNG portfolio suppliers and delivering it to an offshore delivery point along the West Coast.
Gigajoule recently signed a Memorandum of Understanding with the shareholders of Tullow Kudu Limited, including Namcor and Itochu Corporation of Japan, in order to work together to establish the technical and commercial viability for the supply of natural gas (CNG) from the Kudu gas field. De Vos says it is envisaged that the project will be developed in phases, with the building of an offshore submerged terminal, an onshore gas treatment plant for the gas, and 225 km transmission and distribution pipelines to feed the gas to the Cape West coast markets as the first phase. The second phase includes the building of a pipeline to the north and east to supply customers in the Saldanha Bay and inland region. Capital cost estimates for the initial infrastructure requirements will amount to approximately R2.5 billion.
He points out that the Kudu gas field has a proven gas reserve of about 1 trillion cubic feet (Tcf) which according to Gigajoule’s business model could deliver CNG in economic quantities to the West Coast region and Namibian market for at least a decade. The supply of LNG will be sourced from international portfolio suppliers and will be dictated by demand requirements. Depending on the client consumption profile, the distance that gas will have to be transported and other factors, it will be competitively priced to the fuels currently used by those industries which will convert to gas.
In another development the City of Cape Town signed a memorandum of understanding with the Central Energy Fund which will enable it to produce income-creating electricity from the methane gas generated in the City’s landfill sites.
Clive Justus of the City’s utility services, says a report on the project had recently been presented to the Utility Services Portfolio Committee. It gave an update on the project which seeks to substantially reduce the amount of methane gas presently escaping from the landfill sites. This will be done by way of a CDM (Cleaner Development Mechanism) carried out in terms of the Kyoto protocol, with low or little risk to the City.
The City has a number of large landfill sites, some closed and some still operating. These sites all produce landfill gas as a result of decomposition of the waste.
It is envisaged that the methane gas could generate significant amounts of ‘green’ electricity that can be fed into the national electricity network. This has become more lucrative because Nersa, the National Electricity Regulator, recently published very favourable tariffs for supplies which are generated by outside bodies and which are fed into the national electricity grid. To encourage electricity production, Nersa has set the rate for electricity produced from a landfill gas source at 90 c/kwhr. This is considerably higher than the rates that the City would normally pay for the electricity it buys.
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