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- Aug 2, 2010
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Tanzania will save up to $6 billion by 2024 by using its natural gas for electricity generation instead of oil imports, an official with a local gas utility said on Thursday.
Songas says natural gas extracted locally has already saved the east African economy some $1.2 billion to date that would otherwise have been spent on oil for power production.
Songas has sold electricity to state-run Tanzania Electric Supply Company (TANESCO) since 2004.
"Because the power purchasing agreement is for 20 years, we predict to bring more savings, maybe $5 billion to $6 billion," Oswald Mutaitina, Songas' director of business development, told a meeting of regional electricity regulators.
Songas -- a consortium including state-run Tanzania Petroleum Development Corporation and Bermuda-based Globeleq -- gets its gas from Songo Songo Island off the Indian Ocean coast near Dar es Salaam, and generates about 190 mega watts (MW).
The government says Songo Songo's recoverable gas deposits stand at 850 billion cubic feet (cf), while proven deposits -- gas in place -- are about 1.3 trillion cf.
Songas, through operator PanAfrican Energy, a subsidiary of Toronto-listed Orca Exploration, processes 70 million cf per day for use at its power plants and by industrial customers in Dar es Salaam, the country's commercial capital.
Mutaitina said demand stood at between 100 million and 105 million cf per day, and that Songas was expanding its processing capacity to 140 million cf per day by mid-2010.
"(For) the expansion project we are looking at approximately $60 million," Mutaitina said.
PanAfrican Energy, along with the Tanzania Petroleum Development Corporation, has production rights for Songo Songo's gas -- the first to be discovered and extracted in the country. It runs production on behalf of Songas.
Tanzania suffered serious power cuts in 2006 after drought slashed hydro power production, and like many oil-importing countries it has also been battered by high global crude prices.
But its natural gas deposits have bought it some relief.
It has made other discoveries as well as Songo Songo, including one in Mnazi Bay in southeastern Tanzania that the government says holds about 2 trillion cf of proven deposits.
TANESCO says the country's overall power production capacity stands at 600 MW, just above average demand of 570 MW, but below peak demand of 700 MW. The utility forecasts demand growth of about eight to 10 percent each year.
It also generates 100 MW from a gas-powered plant in Dar es Salaam, and plans to add 45 MW from natural gas to the national grid by 2009 and another 200 MW the following year
Songas says natural gas extracted locally has already saved the east African economy some $1.2 billion to date that would otherwise have been spent on oil for power production.
Songas has sold electricity to state-run Tanzania Electric Supply Company (TANESCO) since 2004.
"Because the power purchasing agreement is for 20 years, we predict to bring more savings, maybe $5 billion to $6 billion," Oswald Mutaitina, Songas' director of business development, told a meeting of regional electricity regulators.
Songas -- a consortium including state-run Tanzania Petroleum Development Corporation and Bermuda-based Globeleq -- gets its gas from Songo Songo Island off the Indian Ocean coast near Dar es Salaam, and generates about 190 mega watts (MW).
The government says Songo Songo's recoverable gas deposits stand at 850 billion cubic feet (cf), while proven deposits -- gas in place -- are about 1.3 trillion cf.
Songas, through operator PanAfrican Energy, a subsidiary of Toronto-listed Orca Exploration, processes 70 million cf per day for use at its power plants and by industrial customers in Dar es Salaam, the country's commercial capital.
Mutaitina said demand stood at between 100 million and 105 million cf per day, and that Songas was expanding its processing capacity to 140 million cf per day by mid-2010.
"(For) the expansion project we are looking at approximately $60 million," Mutaitina said.
PanAfrican Energy, along with the Tanzania Petroleum Development Corporation, has production rights for Songo Songo's gas -- the first to be discovered and extracted in the country. It runs production on behalf of Songas.
Tanzania suffered serious power cuts in 2006 after drought slashed hydro power production, and like many oil-importing countries it has also been battered by high global crude prices.
But its natural gas deposits have bought it some relief.
It has made other discoveries as well as Songo Songo, including one in Mnazi Bay in southeastern Tanzania that the government says holds about 2 trillion cf of proven deposits.
TANESCO says the country's overall power production capacity stands at 600 MW, just above average demand of 570 MW, but below peak demand of 700 MW. The utility forecasts demand growth of about eight to 10 percent each year.
It also generates 100 MW from a gas-powered plant in Dar es Salaam, and plans to add 45 MW from natural gas to the national grid by 2009 and another 200 MW the following year
