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A crew member works in the control room onboard the Karmol LNGT Powership Asia floating storage and regasification unit, operated by Karpowership, docked at Cape Town port in this April 19 2022 file photo. Picture: BLOOMBERG/DWAYNE SENIOR
A crew member works in the control room onboard the Karmol LNGT Powership Asia floating storage and regasification unit, operated by Karpowership, docked at Cape Town port in this April 19 2022 file photo. Picture: BLOOMBERG/DWAYNE SENIOR

Karpowership, the world’s biggest supplier of floating gas-fired power plants, is expanding its generation capacity by 50% to tap global demand even as it struggles to get projects going in SA, potentially its biggest market. 

The Turkish company is poised to start generating 1,118 megawatts of power in Ivory Coast, Brazil, the Dominican Republic and French territory New Caledonia this year. Yet the three projects it won in SA have stalled, with 1,220MW of planned capacity mired in legal battles and environmental controversies. 

While Karpowership struggles in SA — the company won the bids in April last year — the projects elsewhere are expected to start up in well under a year. In Africa’s most-industrialised nation, it’s yet to get environmental approvals and hasn’t managed to sign agreements with the national power and port utilities. The award of the contracts has also attracted opposition from environmental activists who want the country to speed up its transition to renewable energy.

“As we have been working tirelessly to reach financial close in South Africa, we are about to deliver similar solutions all around the world,” Kurt Morais, Karpowership’s corporate relations manager, said in a presentation on Tuesday in Cape Town, where its Karmol LNGT Powership Asia vessel, a 278-metre floating storage regasification unit (FSRU), docked to refuel en route to Rio de Janeiro from Singapore.

The company, a unit of Karadeniz Holding AS, already operates gas-fired powerships in countries ranging from Cuba to Ghana and Indonesia, and also has some renewable capacity. It’s considering participating in solar-power projects in SA awarded in tenders run by the government and those planned by Cape Town.

SA is desperately trying to boost capacity as Eskom struggles to meet demand with ageing and unreliable coal plants. The utility cut 4,000MW of electricity from the national grid for a second day on Wednesday, and may implement more than 100 days of power cuts this year. 

While the energy ministry has bemoaned the slow progress in getting Karpowership’s ships connected to the grid, activists and renewable-energy producers have accused the government of dragging its feet on rather taking advantage of abundant solar and wind resources.

SA, which relies on coal for more than 80% of its electricity, is the world’s 13th-biggest producer of climate-damaging emissions. While natural gas produces fewer pollutants than coal, environmentalists say its use will delay a transition to greener energy.

Facilities operated by Karpowership consist of a floating storage regasification unit, a vessel known as an FSRU that stores liquefied natural gas (LNG) at -160ºC,  and a powership several hundred metres away, which uses the gas to generate as much as 450MW of electricity.

The ship in Cape Town can store 125,000m³ of LNG, enough to power a 450MW powership operating 18 hours a day for 40 days. The FSRU is then refilled by an LNG carrier.

The company’s expansion comes as demand for FSRUs surge with Europe trying to wean itself off the use of piped gas from Russia in retaliation for that country invading Ukraine. 

Brazil awarded Karpowership the right to generate 560MW of power after dry weather affected its ability to produce hydroelectricity, according to John Cockin, its business development co-ordinator. 

The use of powerships, which can be used temporarily, are an opportunity for countries to ensure reliable energy supply while ramping up renewable production, Cockin said.

“They can change when they want,” he said. “Gas and LNG is the transition.”

More stories like this are available on bloomberg.com

Bloomberg

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