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Business

Gazprom strikes billion-dollar Namibia deal

Text by NEWS WIRES

Latest update : 2009-06-26

Russia's energy giant Gazprom finalised a one-billion-dollar deal with Namibian energy company Namcor to build a new power plant in the African country. The power plant would generate energy for both Namibia and South Africa.

AFP - Russian energy giant Gazprom said Friday its banking unit had struck a one-billion-dollar (711-million-euro) deal with Namibian energy company Namcor to build a new power plant in Namibia.
   
Under the deal, Russia would build a power plant generating energy for both Namibia and South Africa, getting a foothold in the lucrative Kudu gas field, Namibia's only commercial field to date.
   
The deal was reached during a visit to Windhoek by Russian President Dmitry Medvedev, who left Namibia for Angola on Friday as he wraps up a four-nation African tour that has focused on tapping the continent's energy wealth.
   
"Our Namibian partners have offered us to organise a financing scheme to monetise gas resources," the head of Gazprom International Boris Ivanov told reporters in Luanda.
   
"The cost of the project is around 1.0 to 1.2 billion dollars," he said, adding that the price tag includes the power station, a pipeline and other infrastructure, with construction taking up to four years.
   
"It's not a large deposit but has enough reserves," he said about the Kudu field. "It's a pilot project in Namibia but its economic efficiency is very high."
   
Gazprombank said in a statement that much of the power generated would be exported to South Africa, which is struggling to meet its growing energy needs.
   
"There are plans to use gas from the Kudu field for the power plant. A considerable part of the electricity to be generated will be supplied to South Africa," the company said.
   
The Kudu field, located about 140 kilometres (85 miles) offshore, is estimated to contain 3.3 trillion cubic feet of proven reserves, but years of negotiations over the reserves have yet to yield concrete projects.
   
Medvedev and his counterpart President Hifikepunye Pohamba witnessed the signing of the agreement during his visit to Windhoek.
   
Windhoek and Moscow pledged closer cooperation, a joint communique said on Friday after the first visit by a Kremlin chief to the uranium-rich southern African nation.
   
"Agreement was also reached on the expansion of Russian investments to develop and introduce new large-scale projects in the Namibian economy, in particular in mining, oil exploration and energy," it said.
 

Date created : 2009-06-26

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