Shell's Pullout of Kudu renews talks on Cape Town option

The gas to wire project for Cape Town has come back on the front burner as Shell announced its withdrawal from the Kudu Gas Development off Namibia. Shell was hoping for a Floating LNG unit, but a crucial exploration well, drilled last May confirmed that the reserves could not reach 5tcf, the mark below which an LNG project cannot fly. Some $140 million has been injected into the Kudu project by Shell since it joined Chevron in 1993, but the company now comments it "cannot commit to a sustainable gas export project as envisaged." This has created an opportunity for Shell's earstwhile partners ChevronTexaco and Energy Africa, who through previous agreement now hold 60%, 40% stakes in the field to take another look at the possibility of piping the gas to Cape Town where it could be used to feet an electrical power plant. The South Africa-based independent, Energy Africa, said the identified reserves should be sufficient to support a gas pipeline to Cape Town.