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Invictus signs gas sales MOU for a gas-to-power project

by Staff reporter
22 May 2024 at 16:54hrs | Views
Invictus Energy Limited has announced the signing of a Memorandum of Understanding (MOU) with Dallaglio Investments Pvt Ltd and Himoinsa Southern Africa Proprietary Limited for a gas-to-power project aimed at supplying electricity to the Eureka Gold Mine.

Through Geo Associates (Private) Limited, Invictus Energy and One Gas Resources have partnered with Dallaglio and Himoinsa to provide natural gas from the Cabora Bassa Project as a feedstock for the gas-to-power initiative at Eureka, one of Zimbabwe's largest mines located 50km south of the Mukuyu gas field. Himoinsa will supply the power generation plant and equipment with an initial capacity of 12MW, expandable to 50MW.

The generated power will be supplied to Eureka or other private off-takers via the local grid or the Southern Africa Power Pool if there is excess supply. Following the recent confirmation of the Mukuyu gas-condensate discovery at Cabora Bassa, Invictus aims to capture early monetization opportunities and accelerate the timeline to production and revenue generation.

The high-quality natural gas at Mukuyu-2, which has minimal impurities, allows for a straightforward early production system to generate power or compressed natural gas for onsite power generation at Eureka. This approach minimizes the company's capital and infrastructure requirements for both the pilot project and future full-field developments.

The MOU allows for incremental growth of the pilot project through modular expansion as the resource base grows and additional power off-takers are secured. A feasibility study will be conducted to determine the optimal delivery of power to Eureka, considering options such as wellsite generation of power using existing grid infrastructure or onsite generation with gas transported by truck.

Following the feasibility study, Invictus and Himoinsa plan to execute a binding Gas Sale and Purchase Agreement (GSPA), under which Invictus will provide natural gas to Himoinsa, who will then supply electricity to Dallaglio at Eureka under back-to-back GSPA and Power Purchase Agreements. The feasibility study will also evaluate using Mukuyu-2, post well-testing, as a producer in the pilot project, with Himoinsa's turnkey power generation systems supporting the expansion.

Himoinsa currently provides supplementary and backup diesel power generation to Eureka and other Dallaglio mining operations in Zimbabwe. The transition to gas-fired power will offer Eureka a more reliable and cleaner energy source compared to the current coal-fired and backup diesel power generation, especially during frequent power outages in the country.

The pilot project will also gather long-term production data and dynamic reservoir information to optimize full-field development planning and determine connected resource volumes and development well locations.

Invictus Energy Managing Director Scott Macmillan commented on the MOU, highlighting it as a significant step in the early commercialization strategy and a demonstration of immediate monetization opportunities following the Mukuyu gas discovery. He expressed optimism about the partnership with Dallaglio and Himoinsa and the potential for early production, revenue generation, and proof of concept for future large-scale gas-to-power projects.

Matthew Bell, Director of Himoinsa Southern Africa, expressed enthusiasm for the collaboration, noting the potential for a cleaner, cost-effective, and reliable energy source for the Eureka Mine. He emphasized the advantage of Himoinsa's existing operations at Eureka and the seamless integration of a gas solution.

Dallaglio CEO James Beare underscored the importance of reliable and affordable energy for their mining operations and the benefits of substituting coal and diesel power with natural gas. He affirmed the project's alignment with their goals for sustainable gold production and emissions reduction.

The collaboration among Invictus, Himoinsa, and Dallaglio aims to deliver a mutually beneficial project for Zimbabwe's resources sector, supporting expanded production and sustainable energy solutions.

Source - Byo24News
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