Invictus Energy (ASX: IVZ) executes second major gas sale MOU for Zimbabwe Project

Highlights

• An updated gas sales MOU has been inked between Invictus and Mbuyu Energy for a 500MW gas-to-power project.
• Under the MOU, Invictus would supply gas from its Cabora Bassa Project for the project.
• Feasibility of developing the project will be assessed using the gas produced from the Mukuyu field or any other field developed in the Cabora Bassa project.

Invictus Energy Limited (ASX: IVZ) has hit a major milestone, executing a memorandum of understanding (MOU) with Mbuyu Energy to deliver gas to its proposed 500 MW gas-to-power project. The gas will be supplied from IVZ’s 80% operated and owned Cabora Bassa Project, Zimbabwe.

Details of the MOU

IVZ and One Gas Resources have executed an updated gas supply MOU with Mbuyu Energy. Mbuyu is a Zimbabwean consortium, led by Tatanga Energy, an IPP developer. The consortium is looking to develop a 500MW gas-to-power project.

The updated MOU follows the recent gas discovery at the Cabora Bassa Project, and is built on the previous MOU signed with Tatanga Energy in 2019. The MOU is a precursor to the negotiation of a long-term gas sale agreement for gas supply to power the proposed project.

This is the second major gas sale MOU signed for the Cabora Bassa project. The first MOU was executed with Sable Chemicals.

Key terms of the MOU

Mbuyu will get an initial 12-month exclusivity period and preferred partner status from the finalisation of drilling activity at the Mukuty-2 well.

Heads of terms for a gas supply agreement is planned to be entered between Mbuyu and Geo Associates.

Under the MOU, the parties would undertake feasibility studies to ascertain the criteria for an integrated project, comprising a market clearing price for power generated from the Power Project.

Th development and construction of an up to 50MW pilot power plant might be fast tracked by the parties to utilise the gas generated from the second Mukuyu exploration well, or any subsequent appraisal or exploration well.

IVZ might enter into MOU or other agreements with industrial customers or potential customers of gas expected to be produced from the Cabora Bassa project, for industrial processes.

About the Power Project

In future phases, the power project can be expanded to up to 1,000MW, which equates to around 1.4 trillion cubic feet of gas supply for over twenty years.

The plant to be developed will adhere to world-class standards and assist the future integration of renewable sources of energy into the National Grid. The design of the plant will aim at minimising the environmental footprint. The project will use an efficient Combined Cycle gas Turbine (CCGT) configuration that will include cutting-edge carbon reduction technologies.  

IVZ shares trade higher 

IVZ shares jumped by 6.25% to trade at AU$0.17 apiece at the time of writing on 18 December 2023.