Tanzania Gas Demand to Grow Significantly in 2020, Company Estimate

PanAfrican Energy (PAET), Tanzania’s first natural gas producer, recently published its operational update for 2019, indicating an expected significant growth in the demand for gas in 2020.

In May 2019, the company signed a long-term Gas Sales Agreement for 20 MMscf/d with the Tanzania Petroleum Development Corporation (TPDC), subsequently increased to 30 MMscf/d on a best endeavors basis),.

Above the continued supply of Protected Gas, at an average of 39.8 MMscf/d, in Q4 2019 PAET produced Additional Gas at an average of 70.8 MMscfd (Q4 2018: 44.8 MMscfd) resulting in an average for the year of 63.1 MMscfd (2018: 39.9 MMscfd).

Of these sales, 9.2Bcf was sold TPDC and processed and transported to Dar es Salaam through the National Natural Gas Infrastructure (NNGI).

This gas was used primarily for increased power generation, while the remainder was sold to power and industrial customers in Dar es Salaam via the Songas processing and transportation facilities.

PAET expects further increases in gas demand in 2020, across the power and industrial sectors, and potentially through the expansion of its ongoing compressed natural to vehicles project.

Although the timing is uncertain, additional power generation is expected to be installed at Kinyerezi Thermal Power Station in Dar es Salaam, commencing in the third quarter of 2020, and building to 185MW of combined cycle generation capacity by the end of the year; of which 150MW will be gas-fired generation.

Alongside gas for power generation, PAET is actively seeking to further accelerate industrial expansion in Dar es Salaam and has recently restructured and lowered gas prices to industries to ensure gas remains a cheaper and cleaner alternative to more expensive and far more pollutive fuels such as diesel or coal.

PAET is working to ensure gas production from the Songo Songo field can continue to meet demand beyond 2020, with several initiatives in progress or being evaluated.

Andy Hanna, Managing Director of PanAfrican Energy Tanzania commented: “After a highly successful year, PAET is looking forward to an even more successful 2020. The Company plans to carry out a number of challenging technical projects to meet demand and increase access to the benefits that Tanzania’s indigenous natural gas resources bring to the nation. Success will depend considerably on our highly capable Tanzanian team working alongside our partners TPDC, and on the continued levels of support we have received from PURA, EWURA and other stakeholders in the Songo Songo project. All of the signs are there that we should be optimistic for the year ahead and for the natural gas industry as a whole in Tanzania.”

Tanzania Gas
Natural gas was discovered both offshore and onshore in Tanzania: offshore at the Songo Songo Island, nd onshore at Mnazi Bay.

The natural gas from Songo Songo was first commercialized in 2004 and the gas from Mnazi Bay in 2006. The commercialization of the two discoveries propelled further gas exploration both onshore and offshore.

From 2010, Tanzania has witnessed further exploration and natural gas discoveries with current estimated natural gas reserves of 57 trillion cubic feet (TCF).

Tanzania Power

In 2016, Tanzania’s total power installed capacity was 1,357.69 MW composed of hydro 566.79 MW (42%), natural gas 607 MW (45%) and liquid fuel 173.40 MW (13%).