Exploration partners of the Mnazi Bay concession in southern coastal region of Tanzania, Canadian Wentworth Resources Limited (Wentworth) and French Maurel & Prom Group (Maurel & Prom), have recently announced that the first delivery of natural gas to the new transnational pipeline has been realized on 20th August, 2015.
The Madimba Processing Centre which is the entry point to the new 532 km pipeline and connects Mtwara, southeastern region of the country with its commercial capital Dar es Salaam, received the first delivery for commissioning operations by state-run Gas Supply Company Limited (GASCO) which holds a 20% production stake.
According to the exploration partners, the Mnazi Bay would reach a delivery of 70 million cubic feet per day (mmcf/d) of gas by October, 2015 with the currently first two wells operating while with the start-up of the other three, a maximum production capacity of 80 mmcf/d is expected by the end of the year.
Mnazi Bay’s first delivery is the result of a gas supply agreement signed in September, 2014 between the Government of Tanzania and both exploring and production companies and is expected to double the country’s power generation capacity to 3,000 Mw by 2016 according to Reuters.
In addition, this agreement establishes the option for GASCO to raise the demand of gas to a maximum of 130 mmcf/d for a period up to 17 years at a locked price of USD 3.00 per million British Thermal Unit (BTU) or USD 3.07 per thousand cubic feet.
Mnazi Bay’s partnership is meant to shift the current power generation sector from hydro to gas fired power plants due to recent longer droughts that are hitting the country.
Currently in Tanzania 39% of the electricity generated comes from hydro plants, 30% comes from gas, 29% from fuel and 2% from renewable energies, according to Tanzanian Energy and Water Regulatory Authority (EWURA).
According to the Wall Street Journal, Tanzania is planning to use its now 55 trillion cubic feet natural gas reserves to boost its electricity sector and be less-dependent from oil imports, a movement that would help the country to save USD 1 billion on crude imports a year.