tanzania may be next major gas economy

Tanzania may be next major gas economy

Tuesday, 28 February 2012 06:09
Leonard Magomba

DAR ES SALAAM, TANZANIA - The latest natural discovery offshore Tanzania has heightened the expectation of the state to become a major gas economy as the government prepares its economy to handle the huge foreign investment inflow in gas production projects.

"We have started several strategic plans to prepare the economy to handle huge foreign investment inflow in gas production projects," said Minister for Energy and Mineral Resources, Mr. William Ngeleja

The discovery was made by two international oil and gas companies, Statoil and ExxonMobil which together confirmed that the Zafarani-1 well in Block 2 offshore Tanzania has encountered indications of natural gas in a good quality reservoir.

The Statoil and ExxonMobil said in a statement, "the drilling at a deepwater wildcat in the Mafia Deep subbasin, 80km into the sea, has shown strong indications of the presence of gas."
Without giving details, the firms which started drilling the well last month and are expected to take as long as three months to complete the assignment, said they were still drilling and it was too early to give an exact amount of gas availability and commerciality.

Tanzania has of late become a beehive of oil and gas exploration activities. Encouraged by previous commercial gas discoveries in Songosongo and Mnazi Bay in the Ruvuma basin to the south, investors have poured massive amounts of money to carry out exploration.

About 3.5 trillion cubic feet of gas reserves have already been commercialized with natural gas wells being drilled in Songo Songo and Mnazi Bay gas fields.

The two companies have declared discoveries totaling 60 trillion cubic feet of gas in place, and the Anadarko group is designing a liquefied natural gas (LNG) project.

An analyst believes that Tanzania will soon become a major gas hub considering the fact that there are big discoveries made in Mozambique, and those in the southern part of Tanzania.

Mozambique, the fastest growing energy player in the region, this month estimated that energy firms will spend $50-billion over the next decade to develop its liquefied natural gas (LNG) industry.

The Statoil and ExxonMobil drill site is 160km north-northwest of the Area 1 and Area 4 blocks off neighboring Mozambique operated by Anadarko Petroleum Corp and Eni SPA, respectively, in the Ruvuma basin.

The Zafarani well is also 100km north of the Ophir Energy PLC-BG Group's Chaza gas discovery on Block 1 about 18km off Mnazi Bay, Tanzania, in the Ruvuma basin.
Zafarani is also between115 and120km south of Ophir-BG's Chewa and Pweza gas discoveries on Tanzania offshore Block 4 in the Mafia Deep sub-basin and 75km northeast of Songo Songo gas field.

Pweza and Chewa have resources of 1.7 trillion cf and 611 billion cubic feet respectively, and Chaza, drilled in 2011, has 92 billion cubic feet

Statoil operates Block 2 on behalf of Tanzania Petroleum Development Corporation and has a 65 per cent working interest, and ExxonMobil Exploration & Production Tanzania Ltd has 35 per cent. Statoil was awarded the Block 2 license in 2007.
It is the first exploration well that has been drilled in the country, which covers an area of approximately 5,500sqkm. The water depth at the well location is 2,582 meters and the well itself is planned to reach a depth of 5,150 meters.

Mr. Yona Killaghane, managing director of TPDC, said it was pleased with the preliminary results and was eagerly awaiting further information on this operation.

The gas produced in the southern part of Tanzania is transported to Dar es Salaam through a pipeline where it is used to generate electricity and as fuel in industries.
The natural gas accounts for about 35 per cent of power generated and pumped into the national grid, at 416MW and thus saving billions of shillings that would have been used to purchase heavy furnace oil (HFO), diesel and jet oil to generate electricity.

Dar es Salaam has 35 industries that use natural gas as source of energy in production.

Mr. Kilagane revealed that the use of natural gas for power and industrial production has helped save the nation some US$ 3.3 billion and US$ 200 million respectively whereas the government has earned US$ 146 million in revenues.

Experts have estimated that Tanzania would confirm the presence of around 60 trillion cubic feet of natural gas in the next five years, which would bring in thousands of billions of dollars in investment from the current 7 trillion cubic feet.

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