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South Africa Pushes Away Karpower Gas to Power Project

Turkish owned Karpowership is still unable to get anywhere close to an approval to install a 1,200Megawatt power facility off the South African coast, despite its winning a bid run by the country’s Ministry of Energy.

The project is held up in the crucial environmental approval stage.

Three subsidiaries of the Karpowership Group Karpowership SA Coega, Karpowership SA Richards Bay, Karpowership SA Saldanha, were among the eight preferred bidders announced on March 18, 2021, for the Risk Mitigation IPP (RMIPP) Procurement Programme, aimed at procuring 2,000MW of power to bridge a looming electricity supply gap.

The power-ship companies were to generate 1,220MW of power from imported Liquefied Natural Gas  (LNG), in what was to be the first formal introduction of natural gas into the country’s electricity grid, through Eskom, the state utility.

But Environmental authorisation for the project was denied in June 2021.

The denial of the latest appeal was made public on August 1, 2022.

This is all contrary to the spirit of the bidding process.  “The projects are required to reach financial close by the end of July 2021”, the Ministry of Minerals and Energy said at the time the preferred bidders were announced. “Due to the urgency to bring power online, this date is not negotiable. It is for the preferred bidders to manage all the risks to reach financial close. First power from the projects is expected in August 2022”.

In denying the appeal, Barbara Creecy, South Africa’s Minister of Forestry, Fisheries and the Environment, said she had “the constitutional and legal obligation not to allow a preventable situation in an environment that may potentially harm the health or well-being, in a wide sense, of another person or persons. The need and desirability of a proposed project should also be considered in this context.”

Ms. Creecy’s department has criticised gaps in the group’s consultation processes. It said that requirements were not met, including public participation and the proper evaluation of the potential effects on the environment as well as socioeconomic conditions.

It added that the potential environmental impact of the project could not be properly evaluated because of the lack of a proper underwater noise study and significant gaps and limitations with other assessments. “The final environmental assessment report was not always entirely convincing in dismissing concerns around heated seawater discharges, which could result in temperature increases of up to 15°C in the vicinity of the powerships,” the Minister explained.

 

 

 


Russians Begin A Nuclear Power Plant Construction in Egypt

The Egyptian Nuclear and Radiological Regulatory Authority (ENRRA) has issued a permit for the construction of the country’s first nuclear power plant.

This permit, along with excavation works at site, is a prerequisite for the start of the main stage of construction of the El-Dabaa NPP Unit 1, to be built in the city of El Dabaa on the coast of the Mediterranean Sea, 300 km North-West of Cairo.

Rosatom, the Russian State Nuclear Energy Corporation, says it will “build a reliable state-of-the-art NPP with reactors based on the Russian VVER-1200 (pressurized water reactor) design of the innovative Generation III+, which meets the world’s highest safety standards, and is successfully operated in Russia”.

ENRRA says that the El-Dabaa NPP “will be the first nuclear power plant of this generation on the African continent”.

It will not be the first nuclear power plant on the continent, though. That credit goes to to the Koeberg Nuclear reactor, one of two nucear power plants in South Africa, with combined generation capacity of 1,800MW.

ENRRA says the NPP will consist of four power units, 1,200 MW each. Rosatom says that “four power units with reactors of this generation are operated in Russia: Novovoronezh and Leningrad NPP sites have two reactors each. Outside Russia, one power unit of Belarus NPP with VVER-1200 reactor was connected to the grid in November 2020”.

The NPP is being constructed in accordance with the package of contracts which entered into force on December 11, 2017. In accordance with the contractual obligations, the Russian party will not only construct the power plant but will also supply nuclear fuel for the whole life cycle of the NPP and will provide assistance to the Egyptian partners in training of the personnel and support of operation and service during the first 10 years of its operation. Under a separate agreement, the Russian party will build a special storage and will supply containers for storing spent nuclear fuel.

 

 


Mozambique Starts Construction of 450MW Temane  Gasfired Thermal Plant

Filipe Jacinto Nyusi, President of Mozambique, has laid the foundation stone of the Temane gas and power projects in Inhassoro, Inhambane province.

The act symbolises the start of construction of the Temane Thermal Power Plant (CTT), the Temane-Maputo Electric Power Line (TTP) and a cooking gas (LPG) factory; “projects undertaken by the Government of Mozambique and partners”, Radio Mozambique reported.

Financing close for the project was announced in late December 2021.  Partners include the British energy developer Globeleq; the Mozambican state utility Electricidade de Moçambique, E.P. (EDM) and the South African integrated energy company Sasol.

Debt financing of the $652.3Million project is being provided by IFC, together with its “B” loan participants FMO and Emerging Africa Infrastructure Fund ($253.5Million), US International Development Finance Corporation (DFC) (approximately $191.5Million) and the OPEC Fund for International Development (OPEC Fund) ($50Million). The Multilateral Investment Guarantee Agency (MIGA) has provided up to $251.3Million in political risk insurance to the private sector equity investors. have announced financial close of the Central Termica de Temane power project (CTT)

Electricity from  CTT will be supplied to EDM under a 25-year tolling agreement.

President Nyusi was accompanied on his working visit to the site by Carlos Joaquim Zacarias, the new Minister of Mineral Resources and Energy, along with staff from the Presidency of the Republic and other state institutions.

The CTT is expected to provide electricity to meet the demand of 1.5Million households and will contribute about 14% of the electricity supply capacity available to meet demand in Mozambique..

 

 


Gas to Wire Biz: Opportunity Hidden in Plain Sight

In the first week of February 2022, Andre de Ruyter, CEO of Eskom, gave a low down of South Africa’s electricity generation capacity.

One sentence leapt at us from the statement by the head of the country’s Power Utility.

“From a diesel perspective, Gourikwa is full, so we have full availability of diesel reserves there and at Ankerlig, we’re currently sitting at 81%”.

Gourikwa and Ankerlig are two power plants constructed as gas fired facility. But through all their 15+ years of activity, they have consumed only diesel, a far more expensive fuel.  They never were once hooked on gas. It’s an abnormality that the CEO seems, from his statement, to disregard. This is big opportunity for natural gas. Who is grabbing it?

The story is positively different in Algeria, Egypt, Ghana and Tanzania, the countries we highlighted in one of our s first monthly editions of the year. While Algeria is vilified by much of western media for losing its place as a key exporter of gas to Europe, the country has increased its power sector gas burn, consuming 1.85Billion cubic feet per day (1.85Bscf/d) on domestic power generation alone in 2019. To us, that’s a great problem to have. Ghana’s gas consumption increased from 115MMscf/d in 2017 to 315MMscf/d in 20200, driven by the rise in electricity generation and while Tanzania is a much smaller gas market, the demand was stronger in 2021 than in prior years, partly due to lack of supply from hydro-electric generation

We examine the implications of these for investors, for that’s what matters.

Elsewhere, we are following up on drilling activities across the continent; energy transition updates, the current thinking on geoscience of hydrocarbon search and oilfield technology. We provide status updates on production and other market intelligence through our activity maps on Angola, Equatorial Guinea, Ghana, Mozambique and Nigeria. We also publish rig activity spreadsheets on Angola and Nigeria.

We invite you to become a paying subscriber of our monthly harvest, released, in pdf format, to over 20,000 email addresses.  Help yourself to a front row seat, to a clear sight to activities that should put you ahead of the competition.

The Africa Oil+Gas Report is the primer of the hydrocarbon industry on the continent. It is the market leader in local contextualizing of global developments and policy issues and is the go-to medium for decision makers, whether they be international corporations or local entrepreneurs, technical enterprises or financing institutions. Published by the Festac News Press Limited since 2001, AOGR is a paid e-copy publication delivered around the world. Its website remains www.africaoilgasreport.com, and the contact email address is info@africaoilgasreport.com. Contact telephone numbers in the West African regional headquarters in Lagos are +2348124374087, +2348130733523, +2347062420127, +2348036525979, +2348023902519.

Editor


South African Power Generation in Headlong Plunge, Seeking the Floor

The much touted 40,000MW South African public power generation capacity, once described as the largest in Africa, has transited to the realm of fiction.

It is official.

The total nominal capacity of SA’s coal power stations is 38,733 MW, reports Anton Eberhard, Professor Emeritus and Senior Scholar, Power Futures Lab of the Graduate School of Business at the University of Cape Town.

“15,439MW is currently broken (40%). 5,505MW is out on planned maintenance (14%). Only 46% of coal capacity is currently producing electricity”, the professor announces on twitter. These translate to less than 18,000MW actual coal fired generation. “So much for ‘reliable base load’”, Mr. Eberhard laments.

Some of the figures Eberhard is quoting (40% broken, 14% planned maintenance), are lifted directly from Eskom’s most recent statement (March 9, 2022), announcing Stage 4 (severe) outage.

What he didn’t add was the 6,000MW of renewable energy supplied to the grid by independent power sources, and the 2,000MW diesel fed generation from combined cycle plants which were designed to be fired by natural gas.

In effect, Eskom, once reputed to be the largest power utility on the continent, struggles to transmit 26,000MW of electricity to Africa’s most industrialized economy. It is racing several miles behind Sonelgaz, the Algerian state electricity firm, the only state power company among the continent’s largest five economies, which delivers power to 100% of the population.


Ethiopia Starts Generating Electricity from Africa’s Largest Hydropower Project 

By Okot Njoroge, in Nairobi

Ethiopia has commenced electricity generation from the Grand Ethiopian Renaissance Dam (GERD).

GERD is Africa’s largest hydropower project, with 6,000MW capacity, more than double Ethiopia’s current generating capacity, and will rank among the world’s 10 biggest hydropower plants.

The plant, sited on the Blue Nile River in the Benishangul-Gumuzregion of western Ethiopia, started generating 375 megawatts of electricity from one of its turbines on February 20, 2022.

Estimated to cost anything from $4Billion to $6.4Billion at full completion, it is largely financed by government bonds. 

Ethiopia’s first phase filling of the dam was in July 2020, during which 4.9Billion cubic metres of water was collected. The second phase, in 2021, raised the volume to 18.4Billion cubic metres of water. The 74Billion cubic metre-capacity dam is expected to take five to seven years to fill.

An influential, strident critic of the project is Egypt, which considers GERD as a significant threat to its water supply. Egypt lies downstream of the Nile and has called on international organizations, including the United Nations, to stop Ethiopia from filling the dam while the three countries most affected: Egypt, Sudan, and Ethiopia, agree on how to fill it. Egypt’s President, Abdel Fattah El Sisi, has frequently declared that his country’s national security is a red line and stressed the need to reach a binding agreement on the filling and operation of the dam.


Nigerian Grid Stability Improves, But Power Generation Down, in 2Q 2021

The Nigerian Electricity Regulatory Commission (NERC) reports “a sustained improvement in grid stability during the second quarter of 2021” in its latest quarterly report.

“This was a result as there was only a single incidence of Total Collapse (i.e. total blackout nationwide)”, the agency says.

There was also no partial collapse (failure of a section of the national grid) during the quarter under review, NERC notes.

Nigeria’s electricity transmission grid is one of the weakest in the country’s electricity value chain. Power producers often lament the fact that their gross output can hardly be wheeled to the distribution companies, because of the persistent failure of the grid.

“To sustain the improvement in the grid stability in subsequent quarters, the Commission has continued to enforce and monitor the compliance to its directive”, NERC declared in the report.

Meanwhile, the improvement in transmission was not complemented by the quality of generation of electrical power in the period under review. During the second quarter 2021, Nigeria’s average of daily available generation capacity was 5,472.10 MW, implying a decline of 8.1% compared to 5,956.23 MW recorded in the preceding quarter. However, the total electrical energy generated was 9,187,337 MWh – 3.27% less than the 9,498,786 MWh generated during the preceding quarter. A total of 8,909,910 MWh (96.98% of total generation) was delivered to the grid during the second quarter 2021, implying that the generation stations used 3.02% of their generation. Meanwhile, station’s own-use is expected to be within 2% in line with the MYTO assumptions. Finally, due to energy export, energy sold on bilateral contracts and transmission losses, only 7,332,949.05GWh was delivered to the Discos during the quarter.


It’s Certain: A 450MW Gasfired Power Plant Will be Built in Temane, Mozambique

UK based power developer Globeleq has announced the Final Investment Decision on the proposed 450 MW gas-fired power plant to be sited in gas rich Temane, in Mozambique’s Inhabane district.

The plant, costing $652.3Million and scheduled for completion in 2024, will be debt financed by IFC, together with its Emerging Africa Infrastructure Fund ($253.5Million), US International Development Finance Corporation (DFC) (approximately providing $191.5Million) and the OPEC Fund for International Development (OPEC Fund) ($50Million). The Multilateral Investment Guarantee Agency (MIGA) has provided up to $251.3Million in political risk insurance to the private sector equity investors.

Located at Temane in Inhambane Province, the Central Termica de Temane (CTT) power project will supply power to the power utility Electricidade de Moçambique, E.P. (EDM) under a 25-year tolling agreement. CTT is expected to provide electricity to meet the demand of 1.5Million households and will contribute about 14% of the electricity supply capacity available to meet demand in Mozambique.

Full Value Chain

“CTT also anchors a new 563 km high-voltage transmission line (the Temane Transmission Project (TTP)) and secures the first phase of the interconnection of the southern grid to the central and northern grids of Mozambique”, Globeleq says in the release. “This will establish a corridor of electrification and ensure a more stable and secure grid and enable the connection of future renewable generation projects. The TTP is owned by EDM and will be funded using grant and concessional finance provided by the World Bank, Africa Development Bank, Islamic Development Bank, OPEC Fund and the Norwegian Government. Together, the entire value chain (gas development, gas fired power plant and transmission infrastructure) will see an investment of more than $2Billion”.

The British developer says the project “is aligned with the Paris Agreement and will support Mozambique’s longer-term sustainable energy transition to net-zero by 2050. CTT’s flexible technical and commercial configuration allows for a variable supply of baseload and dispatchable power and will deliver complementary power so that Mozambique can maximise renewable energy generation projects on its grid and pursue lower carbon energy development. In addition, the Siemens SGT-800 turbines chosen for the plant can be upgraded to handle high hydrogen content, further reducing the plant’s carbon impact”.

Linda Munyengeterwa, IFC’s Regional Industry Director for Infrastructure, Middle East & Africa, commented: “This is our third power investment in Mozambique, and we remain committed to supporting the sustainable development of the country’s electricity sector”, said

The project will be built by the Spanish contractor TSK, utilising Siemen’s gas turbine technology. “TSK has extensive experience in designing and constructing similarly sized combined-cycle power plants and will leverage their in-country construction experience during the 34-month construction period”, Globeleq explains. “CTT is expected to generate around 830 jobs during construction and 90 permanent jobs during operations. This excludes engineering and other work performed off-site. Mozambicans will be prioritized for jobs during both construction and operations. It is estimated that the project will support the creation of 14,000 indirect jobs and livelihoods when it becomes operational in 2024”.

CTT is expected to provide first power in 2024

 


Cairo, Riyadh Sign $1.8Billion Power Connection Deals

Egypt and Saudi Arabia have finally inked a long-awaited agreement to connect the electricity grids of the two countries.

The $1.8Billion 500kV high voltage direct current HVDC line will have a capacity of 3GW and is planned for completion by 2025.

It will link a converter station at Badr, northeast of Cairo with ones at Tabuk and Medina in Saudi Arabia.

The project will involve the construction of approximately 1,350 kilometres of overhead transmission cables and 22 kilometres of subsea cables in the Gulf of Aqaba.

Japan’s Hitachi ABB Power Grids will partner private Egyptian construction firm Orascom on the Egyptian side and Saudi Services for Electro-Mechanic (SSEM) on the Saudi side.


Tlou Energy Talks Up Small Power Project, with a Trickle of Gas as Feedstock

By Sully Manope, in Windhoek

Tlou Energy, the AIM listed energy company focused on Botswana, is talking up its planned gas to power project, expected to deliver 10MW at peak.

Botswana has a severe energy deficit. The country produces less than 500MW but peak demand is 702MW, according to Government’s statistics.

Going by the frequency with which Tlou Energy publishes media updates on its “gas to power” project, it is easy to assume that the facility, when commissioned, will make a dent on Botswana’s power supply. But 10MW is minuscule, even by the humble scale of Botswana’s power consumption.

What’s more, Tlou Energy reports “sustained natural gas flows” from Lesedi wells Mining Licence, located in a Coal Bed Methane asset, but it doesn’t report what volume the so-called ‘sustained natural gas flows’ is delivering. It so happens that Proven + Possible (2P) gas reserves in the licence is all of 41Billion cubic feet, according to the company’s published Independent Gas Reserves Certification.

Tlou  Energy says that the  licence is valid until 2042  and that it already secured Environmental approval for development. Initial Power Purchase Agreement is negotiated with Botswana Power Corporation (BPC) and Generation Licence is approved by Botswana Energy Regulatory Authority (BERA).

It plans to construct 66kV Transmission Lines to connect the Lesedi project to the grid (~100 Km), install generation assets, initially up to 2 MW of power.

It has to  drill additional gas wells to supply up to 10 MW of power and  add additional generators (up to 10 MW).

“Once the initial 10MW is in place the company plans further expansion”

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