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Tuesday, December 19, 2023
Australian firm Invictus Energy and One Gas Resources have executed an updated Gas Supply MOU with Mbuyu Energy, a Zimbabwean consortium led by IPP developer Tatanga Energy. The consortium, which includes existing Invictus’ institutional shareholder Mangwana Opportunities Fund, is seeking to develop a 500MW Gas to Power project.
Following the recent confirmation of the discovery of gas at the Cabora Bassa Project, the updated MOU builds on the previous MOU signed in December 2019 with Tatanga Energy. The MOU is a precursor to the negotiation of a full Long Term Gas Sale Agreement (GSA) to supply sufficient gas to power the proposed plant.
The plant can be expanded in future phases to up to 1,000MW (equating to a forecasted demand of approximately 1.4 trillion cubic feet of natural gas over 20 years). The updated MOU will see the parties work together to assess the feasibility of developing the project utilizing gas produced from the Mukuyu field or any other field developed in the Cabora Bassa project.
The Power Project will be developed in line with world class standards and will support the further integration of renewable sources of energy into the National Grid.
The project will be designed to minimize its environmental footprint and will utilize an efficient Combined Cycle Gas Turbine configuration (CCGT) that will incorporate cutting-edge carbon reduction technologies.
The development of the Gas to Power Project will be synchronized with the broader development of the Mukuyu field and the Cabora Bassa project as a whole including gas production, transportation and the processing infrastructure required to provide natural gas feedstock to the power plant.
Preliminary feasibility studies have identified a number of suitable locations that provide the ability to supply electricity through the local grid as well as potentially export to customers through the Southern Africa Power Pool (SAPP). The Mukuyu gas field is located within 100 kilometers of 3 major interconnectors to the SAPP grid which provides the ability to export power to any country in the region (see Figure 1 and Figure 2).
Mbuyu will enter into discussions with a number of existing high energy demand power offtakers including large scale miners, industrial and other large-scale users of energy – many of whom currently import their electricity from neighboring countries. The project will supply much needed reliable and affordable baseload power to these companies.
The ability to source reliable baseload power from a new domestic supply will provide significant economic benefits to potential customers many of whom have had to curtail operations and expansion plans as a result of the power deficit the country is currently facing.
This is the second major Gas Sale MOU executed for the Cabora Bassa project following the MOU executed with Sable Chemicals to provide gas feedstock for the manufacture of ammonium nitrate fertilizer which is currently supplied by rail from South Africa.
Invictus Managing Director Scott Macmillan commented: “Signing this MOU with Mbuyu Energy to develop a 1,000MW Gas to Power project is another significant step forward in our early commercialization strategy as we look to progress the Cabora Bassa project following our gas discovery at Mukuyu. The potential offtake is a substantial volume of gas of up to 1.4 trillion cubic feet which will underpin the commercialization of the Mukuyu gas field. This MOU demonstrates the huge demand in an energy starved market in Zimbabwe and the wider region.
“Natural gas and power are in high demand in southern Africa due to increasing supply shortages of natural gas from mature fields that are now in decline, the retirement of over 10,000 MW of aging coal fired power infrastructure in the region and the increasing adoption of gas for industrial use and as a source of cleaner energy.
“We look forward to working closely with Mbuyu Energy and our partners One-Gas Resources to progress the project and with the ultimate goal of providing reliable and affordable baseload power to Zimbabwe and the region.”
Director of Mbuyu Energy Tunde Akerele commented: “We are thrilled to join forces with Invictus and One Gas Resources to not only unlock the immense potential of the Mukuyu discovery, but also pave the way for a cleaner and more sustainable energy future for Zimbabwe. This MoU signifies a critical step forward in transitioning Zimbabwe away from its reliance on coal power generation and towards a more diversified energy mix that includes natural gas and renewables. The introduction of much-needed dispatchable energy for the national grid will enhance energy security, reliability, and facilitate the increased integration of renewables.
“The project also has significant potential to drive economic growth, fostering new industries, creating jobs, and stimulating broader economic development across Zimbabwe. We are confident that the Gas-to-Power Project represents a turning point for Zimbabwe’s energy sector and its journey towards a cleaner and more prosperous future. We look forward to collaborating with Invictus, One Gas Resources, and all stakeholders to bring this transformative project to fruition and unlock a brighter energy and economic future for the nation.”
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