Sudan offers payment in oil for power project

Bharat Heavy Electricals Ltd (Bhel) is likely to revive an agreement to set up a 1,000MW power generation project in Sudan, for which the war-ravaged African nation is willing to pay in crude oil, two senior Bhel executives said.

Energy security: A file photo of a 600MW Western Mountain Gas Turbine power project in Libya set up by Bhel. India and China are in a race to acquire stakes in scarce hydrocarbon blocks overseas.

Bhel is already constructing the 500MW Kosti thermal project for the National Electricity Corp. (NEC) of Sudan—the country’s largest power project, expected to be commissioned this year. The Indian government has given a $350 million (Rs1,554 crore) line of credit for the turnkey contract, which is valued at $457 million.

The Kosti project agreement between Bhel and NEC was signed in 2006. At that time, a memorandum of understanding (MoU) for capacity expansion of the project was also signed, in which Sudan had offered to pay back in crude oil. But nothing came of it.

“Sudan wants to revive the MoU and wants us to set up a 1,000MW project at Sudan port instead of Kosti, as their load centre is there, through a line of credit given by the Indian government. They have also offered us to make payments through crude oil or cash,“ said a senior Bhel executive who did not want to be identified. “Since this is one of the ways to help the country’s quest for energy security, we will pursue this opportunity.”

Sudan produces around 520,000 barrels of oil a day. Three of its 22 oil blocks are yet to be explored.

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