Tullow Oil Plc (TLW) and its Russian and Japanese partners expect to agree on natural-gas sales from Namibia’s Kudu field this year, allowing project development to start in 2012.

“We’ve been making good progress, we have finalized the concept there for gas to shore” delivery, Tullow Chief Operating Officer Paul McDade said today in a phone interview. “Given it’s a single gas supply to a single power station, we prefer to do the work on the commercial agreements now before we start any major expenditures.”

London-based Tullow, Itochu Corp. (8001) of Japan and Russia’s OAO Gazprombank, which acquired a stake in Kudu from OAO Gazprom, plan to develop the field to supply gas for power generation,McDade said.

The U.K. explorer with the most licenses in Africa has reduced its stake to 31 percent from an earlier 70 percent in the field, which holds about 1.8 trillion cubic feet of gas, according to Gazprom estimates.

The Kudu gas project is expected to cost about $7 billion and generate 800 megawatts of electricity for Namibia and export to South Africa, according to the state-run utility Namibia Power Corp., National Petroleum Corp., which is Namibia’s state- owned oil company, and government documents.

Source: Bloomberg