Sunbird soars on gas offtake agreement

Shares in Perth-based Sunbird Energy finished the day's trading on the ASX up 26 percent at 12.5 cents, after announcing an agreement for the supply of gas from its Ibhubesi gas field in South Africa to Eskom Holdings’ Ankerlig power station.

Midway through the day, Sunbird shares were up as high has 71 per cent on the previous day's trading price, as trading in the stock intensified.

The gas project is a joint venture between Sunbird and South Africa’s national oil company PetroSA, with Sunbird owning 76 per cent.

The term sheet for the agreement includes provisions for the supply of 30 billion cubic feet of gas per year for up to 15 years to the power station, which is about 40 kilometres north of Cape Town.

“The delivery of gas from South Africa’s largest proven gas field provides for a secure, cleaner and significantly lower cost fuel to Ankerlig while assisting in the development of the Orange Basin and the creation of a new industry and much needed jobs,” Sunbird chairman Kerwin Rana said.

Mr Rana said the commercialisation of the Ibhubesi gas project would provide a foundation for the development of an integrated gas economy on the west coast of South Africa.

In a statement, Sunbird said all necessary environmental permitting approvals were due for completion by the third quarter of 2015.

It anticipated first gas out of the field and into the power station in 2018.

Sunbird shares were 41.4 per cent higher at 14 cents per share by 12:10pm.