Invictus signs tentative gas sales deal for Zimbabwean discovery

Australia-listed junior Invictus Energy has signed a tentative agreement to sell up to 1.4 trillion cubic feet of gas to a buyer in Zimbabwe if it can prove it has discovered sufficient resources at its Mukuyu find in the north of the country.

Invictus recently reported it had intercepted 34.9 metres of net pay in its Mukuyu-2 sidetrack probe in the frontier Cabora Bassa basin, with flow tests yet to be carried out.

A commercial gas discovery of the size Invictus is suggesting, would have a major impact on Zimbabwe’s coal-dependent economy which is also reliant on energy imports.

Nevertheless, the company is preparing the ground to monetise any commercial gas volumes it does find and, together with its local partner, One Gas Resources, has updated a memorandum of understanding to supply gas to a 500 megawatt power plant being proposed by Mbuyu Energy, a Zimbabwean consortium led by Tatanga Energy.

The consortium — which includes Mangwana Opportunities Fund, an existing institutional shareholder in Invictus — has plans to expand double the plant’s capacity to 1000 MW, which equates to about 1.4 Tcf of gas over 20 years.

The original MoU also covered a 500 MW plant, but with an option to increase capacity to 850 MW.

The December 2019 deal envisaged Invictus supplying 30 million cubic feet per day over 20 years — which equates to about 219 billion cubic feet — with an option to increase this volume to 100 MMcfd, or 730 Bcf over the life of the contract.

To progress this updated MoU, Mbuyu will enter discussions with existing power offtakers, many of whom currently import their electricity from neighbouring countries.

Invictus managing director Scott Macmillan said the Mbuyu MoU is a “significant step forward in our early commercialisation strategy… following our gas discovery at Mukuyu”.

Mbuyu Energy director Tunde Akerele said a commercial deal, if finalised, would help Zimbabwe transition from coal-fired power.