Govt signs gas supply deal to double power generation

THE government has signed an agreement with French oil producer Maurel et Prom and Wentworth Resources for the supply of gas aimed at doubling the country’s power generation capacity to 3,000 megawatts by 2016.

Oslo Stock Exchange and London AIM-listed Wentworth Resources said in a statement that initial gas delivery was expected to begin between Jan. 22 and April 22 next year.

The natural gas will be supplied to a 532-km government-owned pipeline from the south of the country to Dar es Salaam. “The signing of the Mnazi Bay gas supply agreement is a significant advancement in the development of the gas industry and lays the foundation for the future domestic gas development in Tanzania,” Bob McBean, Wentworth Resources’s executive chairman, said in a statement.

Maurel et Prom is the operator of the Mnazi Bay licence with a 48.06 per cent production interest, while Wentworth owns a 31.94 production stake. Staterun Tanzania Petroleum Development Corporation (TPDC) retains the remaining 20 per cent production interest in the licence.

The Permanent Secretary in the Ministry of Energy and Minerals, Eliakim Maswi confirmed to reporters in Dar es Salaam yesterday about the agreement.

He said the power supply deal with Mnazi bay investors would help to boost growth as it assures the nation of reliable power supply to feed its rapid expanding economy.

Under the agreement, the Mnazi Bay partners will deliver to the government’s pipeline up to a maximum of 80 million cubic feet per day (mmcf/d) of natural gas during the first eight months, with an option to increase over time to a maximum 130 mmcf/d of gas for up to a 17-year supply period.

The gas price is set at $3 per million metric British thermal unit (mmbtu) escalating with the United States CPI Industrial index, according to details of the gas deal released by Wentworth.

SOURCE: DAILY NEWS

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