UPDATE 1-Gazprom to start building Namibia gas plant in Jan

* Understanding with Eskom for power purchase

* Eskom to buy 500 MW, Namibia to keep remaining 300 MW

(Adds details)

CAPE TOWN, Nov 5 (Reuters) - The construction of the long-delayed gas-to-power Kudu project in Namibia, expected to generate 800 megawatts of electricity, will start in January, the head of Gazprom International said on Thursday. Boris Ivanov, head of the international arm of Russian gas export monopoly Gazprom (GAZP.MM: Quote, Profile, Research), said Namibia had chosen Gazprom to set up a new consortium with Namcor and Tullow Oil (TLW.L: Quote, Profile, Research) to complete the historic project.

"We will build and will start the project in January ... that will be the first of a gas monetisation strategy that we are trying to implement in Africa in general and in Namibia in particular," Ivanov told an African oil conference in Cape Town.

Gazprom in June signed a memorandum of understanding with Namibia's Namcor to help organise funding for the $1.2 billion project. [ID:nLQ889047]

The project involves pumping gas from the Kudu field about 170 km (100 miles) offshore to an 800 MW combined cycle gas power station at the coast in the south of the country.

It has been delayed due to disagreement over commercial terms, as well as technical difficulties in piping the gas.

Ivanov said Gazprom had agreed for South Africa's utility Eskom [ESCJ.UL] to buy 500 MW of that power, with the remaining 300 MW to go to Namibia.

"We have made an understanding on paper with Eskom about a power purchase agreement for the future electricity offtake from this project ... Eskom wil be buying 500 MW ... 300 MW will go to the Namibian government," he said.

A Tullow Oil official said earlier this week that it would take up to 36 months from the signing of the deal to produce the first gas. (Reporting by Agnieszka Flak; Editing by Keiron Henderson)