Australian-listed company Sunbird Energy has received government approval for the acquisition of the Ibhubesi gas project off South Africa's west coast, paving the way for a multi-billion rand investment that would boost the country's gas-to-electricity generation capacity.
Sunbird and its South African empowerment partner Umbono Capital were "particularly happy with the extremely professional and timely handling of the approvals process by the regulator", Sunbird said in a statement on Wednesday.
The approval establishes Sunbird as the operator of South Africa's largest and most advanced undeveloped gas field with a 76% working interest, with national oil company PetroSA holding the remaining 24% of the licence.
"On our current economic modelling of the 2P reserves base, the project has a potential net present value of over US$1-billion," said Sunbird Energy chairman Kerwin Rana.
Sunbird said it would be looking to supply gas from Ibhubesi to state company Eskom's 1 338-megawatt (MW) Ankerlig power station, which is currently burning expensive imported diesel, and a new 474 MW gas-fired station for which the Department of Energy has requested private sector proposals.
"With the Ibhubesi gas project being South Africa's largest proven gas field and its strategic location on the energy-constrained west coast, Sunbird is in a strong position to commercialise a domestic gas reserve of national importance," Rana said.
The company said it had started field development planning as part of the front end engineering and design phase of the project, and would make a final investment decision by early 2015.