Sunbird signs South African gas sales Term Sheet
THE ROADHOUSE BOWSER: Sunbird Energy (ASX: SNY) received a boost to its plans to commercialise South Africa’s largest proven gas field, Ibhubesi, with the signing of a as Sales Agreement (GSA) Term Sheet with one of Africa’s largest energy suppliers.
The company has signed the GSA with Eskom Holdings for the supply of gas to the Ankerlig Power Station on the west coast of South Africa.
The deal comes at a time when the nation is looking to improve a serious energy crisis with the introduction of new natural gas supplies.
The GSA Term Sheet is a culmination of two years of work between the technical, commercial and legal teams of Eskom and the Ibhubesi gas project (IGP) joint venture – Sunbird (76 per cent) and PetroSA (24 per cent) – and sets the key commercial terms and processes for the finalisation of a binding GSA during the course of 2015.
The GSA Term Sheet includes provisions for the supply of 30 billion cubic feet (Bcf) of gas per year for up to 15 years to the Ankerlig power station, located about 40 kilometres north of Cape Town.
Sunbird said the Sign off of the GSA Term Sheet demonstrates Eskom’s commitment to the IGP and was a major milestone for the development of Ibhubesi by connecting South Africa’s largest proven gas field with a gas market at the Ankerlig power station.
The supply of Ibhubesi gas to Ankerlig will allow Eskom to realise impressive fuel cost savings, while providing a new and cleaner burning energy supply to South Africa.
The company said the development also provides a route to market for IGP’s existing 2P reserves of 540 Bcf (SNY 76 per cent: 410 Bcf) as it will encourage further exploration and development in the Orange Basin.
Sunbird’s independent experts estimate there to be a further 7.8 trillion cubic feet (Tcf) (SNY 76 per cent: 5.9 Tcf) of best estimate prospective gas resources in the company’s 5,000 square kilometre Production Right area.
“The signing of this GSA Term Sheet with Eskom, is a significant advancement in the commercialisation of the Ibhubesi gas project which will have an extremely positive developmental impact while providing a tremendous opportunity for major value growth for all stakeholders including Sunbird shareholders,” Sunbird Energy chairman Kerwin Rana said in the company’s announcement to the Australian Securities Exchange.
“The delivery of gas from South Africa’s largest proven gas field provides for a secure, cleaner and significantly lower cost fuel to Ankerlig while assisting in the development of the Orange Basin and the creation of a new industry and much needed jobs.
“We look forward to continuing to work closely to achieve our common goal of delivering gas from the Ibhubesi gas project to Ankerlig power station.”
Website: www.sunbirdenergy.com