Invictus unlocks second lucrative gas supply deal for Zimbabwe project
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Special Report: With a second gas supply MoU in place, Invictus has further underpinned development of the Cabora Bassa oil and gas project.
Invictus Energy (ASX:IVZ) continues to lay the foundation for the development of its highly prospective Cabora Bassa oil and gas project in Zimbabwe with the signing of a memorandum of understanding (MoU) for the supply of gas to a proposed gas-fired power plant.
Under the non-binding MoU with Tatanga Energy, both parties will jointly investigate the economic and commercial viability of supplying gas to Tatanga’s proposed 500-megawatt (MW) plant that will supply electricity to the national grid and captive clients in Zimbabwe, Zambia and Mozambique.
Minimum gas supply covered by the MoU is about 11 billion cubic feet (Bcf) per year and could be increased to about 36.5Bcf per annum.
Tatanga’s proposed plant will be built in two phases, with the first phase capable of generating about 150MW while the second phase will add 350MW to its generation capacity.
Location of the plant will be determined by factors including proposed pipeline routings and access to transmission infrastructure including the Southern Africa Power Pool.
The MoU with Tatanga adds to the company’s existing MoU to supply Sable Chemical Industries with 70 million cubic feet of gas per day for a 20-year period to replace imported ammonia for the production of fertiliser.
“Signing this MoU with Tatanga Energy to develop a 500MW gas-to-power project is another significant step forward in our commercial negotiations as we look to progress the Cabora Bassa project,” managing director Scott Macmillan said.
“Zimbabwe and Southern Africa is in the midst of an energy crises with the region enduring acute energy shortages which is hampering industry and economic growth.
“The potential gas supply of up to 100 million cubic feet per day for 20 years is a substantial volume, which will underpin the development of any commercial gas discovery we make in the Cabora Bassa project.
“This MoU demonstrates the huge local gas demand in an energy starved market in Zimbabwe and we expect to enter into additional gas supply MoUs in the future.”
It is also worth noting that the maximum gas supply of 730Bcf covered under the MoU represents just 8 per cent of the project’s potential resources.
This is notable given that South Africa is projected to have a supply deficit of up to 1.1Bcf of gas per day by 2020 due to declining production from mature fields and the retirement of more than 10,000MW of ageing coal-fired power plants in the region.