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Gas in Namibia -Implications for the

region Roger Swart

NAMCOR1st June 2005

NOT AN OFFICIAL UNCTAD RECORD

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Talk outline

Namibia’s locationWhy gas?Namibia’s potential

Conventional resourcesUnconventional resources

Implications for the region

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NAMIBIA

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Why gas?

Increasing power demand in southern Africa Fastest growing energy resource

70% increase from 2001 to 2025 Clean fuel Cheaper, quicker construction More efficient

U.S. & Europe - domestic supply dwindling Significant reserves remain undiscovered

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South African Generation

Source: SA Department of Minerals and Energy, Integrated Energy Plan, 2003

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Power generation in Europe

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Power generation costs in Europe

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U.S. Natural Gas Production, Consumption, and Imports,

1970 - 2025 (trillion cubic feet)

0

5

10

15

20

25

30

35

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Consumption

Production

Net Imports

History Projections

0

1

2

3

4

5

6

Pipeline Liquefied Natural Gas

Natural Gas Net Imports, 2002 and 2025(trillion cubic feet)

20022025

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Net U.S. Imports of Natural Gas, 1970-2025

(trillion cubic feet)

-1

0

1

2

3

4

5

6

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

History Projections

Canada

Liquefied Natural Gas

Mexico

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Current US LNG terminals

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Future US LNG terminals

Nearly all of the increase in net US imports is expected to come from LNG

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Shipping route

c. 17 days sailing

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Namibia’s potential

Kudu

Kunene

Lüderitz

Orange

Walvis

Namibe

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Namibia’s potential

Kudu Gas Field Proven 1.4 tcf Considerable upside remains (~8tcf) Advanced feasibility stage

800 MW CCGT in Namibia Extend to 1600 MW later

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Namibia’s potential

Other Orange BasinDeeper water playsInboard plays; cf. South African portionSource rock widespread

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Namibia’s potential

Kudu

Kunene

Lüderitz

Orange

Walvis

Namibe

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Block 1711

Originally licence held by VancoSince November 2004 under NAMCOR curatorshipSeeking partnersLarge (>300 sq km) 4-way closureHigh reliefAbundant DHI’sPotentially large reserves

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Regional Seismic Line

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Unconventional Resources

HydratesAbundant in Block 1711Excellent BSR’sSampled with drop coresPartly thermogenic sourceAlso recognised in Lüderitz Basin

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Hydrates

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Unconventional resources

HydratesBusiness challenges

Lack of supporting infrastructurePiggy back on conventional development in 1711?

What is total volume of gas in place? What is total volume of gas recoverable? What rates can we produce at? Additional operating/maintenance expense?

Potentially a huge resource for region

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Regional Implications

Gas potential of southern Africa highSufficient to satisfy some of the immediate energy demands of regionLNG market in Europe and USA to grow

West Africa well positioned

Projects will result in significant FDIPositive impact on regional GDP growth

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Thank you