22 January 2011 (Source: Guardian IPP Reporter, Dar es Salaam, Tanzania

Recent discoveries of natural gas off the coast of Tanzania have taken the East African nation’s total reserves to 7.5 trillion cubic feet, sufficient to allow exports to the region, the East African Community said.

Tanzania and the regional grouping are discussing the possibility of building a pipeline from the commercial hub of Dar es Salaam north through Tanga to Mombasa, Kenya, according to a statement e-mailed to Bloomberg from the body.

Earlier reports last year said the Toronto-listed Orca Exploration (ORCb.V) plans to raise daily natural gas production at the Songo Songo field in Tanzania by 60 percent by the end of 2012 amid growing domestic power demand.

The company’s 2009 annual report, seen by Reuters said infrastructure constraints limited production capacity to 90 million cubic feet a day.

The reports said a target for 2010 was to “assist … in planning a permanent expansion of the infrastructure system to 144 million cubic feet … with the intention that the extra capacity will become operational by the end of 2012.”

The company said in November it saw capacity reaching 140 million cubic feet daily within two years.

Demand for power is surging in east Africa’s second largest economy and Tanzania is expected to save billions of dollars over the next 20 years using natural gas instead of oil imports.

Orca said it planned this year to increase its gas processing and transportation capacity on a temporary basis to 105 million cubic feet per day.

“To increase the overall capacity of the infrastructure system to operate at 200 mmcfpd, a twin onshore pipeline will need to be constructed. The timing of this will be dependent on the increase in gas demand, but it is forecast to be required by 2015/16,” the reports said.

Orca operates the Tanzanian project via its wholly-owned subsidiary PanAfrican Energy and in cooperation with power company Songas, a consortium including state-run Tanzania Petroleum Development Corporation and Bermuda-based Globeleq.

It supplies the gas to 35 industrial customers and for power generation for the national grid by Songas and state-run Tanzania Electric Supply Company.

“Based on the current reserves and anticipated field deliverability profiles, Orca intends to develop gas markets that will utilise approximately 100 to 120 million cubic feet of additional gas on an average annual basis.” said the reports.

New Trend Africa reported recently that natural gas production at Songo Songo in Lindi will be doubled to meet the growing demand of gas for electricity generation and for vehicles.

Production of gas from 5 out of 11 wells at Songo Songo is currently at the rate of 70 mm standard cfpd but processing facilities are inadequate. Plans are underway to expand the processing capacity to 140 mm cfpd so that more gas could be shipped to Dar es Salaam for additional power generation, compressed natural gas (CNG) for vehicles, industries and domestic use.

The plans are contained in a report by Tanzania to the 4th East African Petroleum Conference where Tanzanian officials to the three-day conference were led by the minister foe Energy and Minerals, William Ngeleja.

The offshore Songo Songo natural gas fields were discovered in 1974 and gas production started in July 2004. According to Tanzania Petroleum Development Corporation, in order to double gas production at Songo Songo, more wells have to be drilled to the north and west of the island to increase reserves for the growing multiple use of natural gas.

Gas production at the Mnazi Bay in Mtwara region is currently estimated at 0.9 mm cfpd and is used for generating 4.5 MW of electricity for Mtwara and Lindi.

Engineer Joyce Kisamo told the conference organised by the East African Community secretariat that natural gas was ideal as a source of energy in urban areas because it is environment friendly. According to her, Tanzania currently has four gas sites at Songo Songo (1974), Mnazi Bay (1982), Mkuranga (2007) and Nyuni (2008).

More gas fields are likely to be discovered given the production sharing agreements the Government has signed with more than 20 oil and gas exploration companies. Eng. Kisamo said the Government’s long term plans were to use natural gas for electricity generation and for cooking.