East African Community Plans to Build Natural Gas Pipeline From Tanzania

21 January 2011 (Source: Bloomberg.net – Nairobi, Kenya)
– By Sarah McGregor

The East African Community said it’s discussing the possibility of building a pipeline to carry Tanzania’s natural gas to other members of the bloc.

The proposal would send the fuel north from Tanzania’s commercial hub of Dar es Salaam to Kenya’s port city of Mombasa, the EAC, based in Arusha in northern Tanzania, said in an e- mailed statement yesterday. The group’s other members are Uganda, Rwanda and Burundi.

COWI A/S, a Danish engineering consultant, in July began studying the cost and environmental impact of the proposed pipeline with a $561,700 grant from the Tunis-based African Development Bank, the statement said.

Recent discoveries of natural gas off the coast of Tanzania have taken the country’s total reserves to 7.5 trillion cubic feet, sufficient to allow exports to the region, according to the statement. It didn’t provide more details.

Gas was found at two sites off Tanzania in a drilling program led by Ophir Energy Plc., a U.K.-based oil and gas explorer, in October, Halfani R. Halfani, director of exploration at Tanzania Petroleum Development Corp., said on Dec. 6. The company was due to start drilling a third deep-water well off Tanzania in December in partnership with BG Group Plc.

There are two gas deposits in commercial production in Tanzania. Songo Songo holds 1.5 trillion cubic feet of gas, while the Mnazi Bay field, near the border with Mozambique, has 2 trillion cubic feet, Halfani said.

Tanzanian waters have seen increased oil and gas exploration over the last several years. The Songo Songo West field may contain about 500 billion cubic feet, Peter Clutterbuck, deputy chairman of Orca Exploration Group Inc., said on Nov. 5. Aminex Plc, an Irish oil and natural-gas explorer, said in July 2008 that its Kiliwani-North gas discovery in Tanzania was commercially viable.

Tanzania: Orca Exploration Announces its Results

4 January 2011 (Source: Tanzania Daily News, Dar es Salaam)
– Abduel Elinaza

ORCA Exploration, through its subsidiary Pan African Energy – Tanzania, has generated a revenue from exploration activities that increased by 44 per cent, thanks to domestic high natural gas demand.

The increase of fund flow in the third quarter of 2010 was attributed to the country’s “hydro generation output declines during the dry season.”

The Orca Exploration Group chairman and Chief Executive Officer, Mr W. David Lyons, said the firm generated USD 6.1milion which is an increase of 44 per cent compared to the same period in 2009.

“Orca’s cash flows are forecast to continue to grow on an annualized basis,” Mr Lyons said in a financial results statement released recently. The big share of the revenue flow came from industrial gas sales volumes which increased by 33 per cent to 8.4 million cubic feet per day (MMcfd).

The utility gas sales also were increased by 17 per cent to 31.7 MMcfd in the same quarter under review. Despite is turnover increase, the company said it may deplete its cost recovery pool that has been brought forward from previous years during the course of the next few months.

Accordingly, Mr Lyons said, until higher capital expenditures are incurred on activities such as the drilling of Songo Songo West, the company’s revenue will reflect the costs incurred during each period plus the relevant profit share.

Nevertheless the year outlook is good for Orca because of number of gas exploration activities and demand. The first EastCoast Transmission and Marketing, Orca’s project, currently being evaluated is the feasibility of a 207-kilometre onshore pipeline that could run parallel to the existing onshore pipeline from the Songo Songo field area to Dar es Salaam.

The CEO said: “There is an increasing exploration activity” offshore East Africa with four gas discoveries by Anadarko in Mozambique and by British Gas 65 kilometres from Songo Songo Island offshore Tanzania.

British Gas is expected to drill a further two wells over the next six months. Statoil and Exxon Mobil also have offshore blocks that are expected to be drilled in 2011. To lead in the development of natural gas markets in East Africa, Orca recently announced the creation of a new infrastructure division, EastCoast Transmission and Marketing.

“This will accelerate the commercialisation of Orca’s Tanzanian gas reserves whilst also creating a new revenue stream for the company,” Mr Lyons said. If successful, Orca plans to lead in the establishment of a coastal gas pipeline network that can be accessed by other upstream operators and used to transport their gas to the principal industrial hubs in East Africa including Mombasa in Kenya.

Northern Petroleum farms out La Tosca prospect to Orca Exploration

8 December 2010 (Source: Northern Petroleum News Release)

Northern Petroleum (LON:NOP) has agreed to farm out the Longastrino Permit in the eastern part of the Po Valley Basin, onshore Italy, in a deal with Orca Exploration (TSX-V:ORC).

Longastrino’s main target is the La Tosca prospect, which is just 2 kilometres away from the Alfonsine gas field. “We are delighted to welcome Orca as a new partner and to this permit,” NOP director Graham Heard said. “This third farm-out in Italy is part of Northern’s ongoing farm-out campaign which to date has involved eight permits. We look forward to further farm-outs.”

Initially Orca will earn a 70 percent stake in the permit by drilling the first well, at a cost of up to €4.3 million. It can then earn a further 5 percent when the well is flow tested and completed, with costs up to €1.3 million.

Once it has taken the full 75 percent stake it will also have to pay back costs of €0.6 million to NOP.

“Orca is delighted to be partnering with Northern Petroleum drilling the La Tosca well,” Orca chairman and chief executive David Lyons said. “We see this as a low risk exploration opportunity in a proven hydrocarbon basin with significant upside potential, “This acquisition is Orca’s second entry into Italy which we believe has substantial reserves and has been overlooked by the major players.”

Drilling is expected to get underway in 2011. La Tosca-1 will be drilled to around 2,500 metres.

NOP estimates that La Tosca has 45 billion cubic feet of gross mean prospective resources, based on 3D seismic. And NOP said that drilling on La Tosca will target the upside to this resource – 85 billion cubic feet gross prospective gas resources.

Italy: Orca Exploration farms into Northern Petroleum’s Longastrino Permit, Po Valley, onshore Italy

8 December 2010 (Source: energy-pedia exploration news)

Northern Petroleum has announced an agreement to farm-out to Orca Exploration an interest in the Longastrino Permit in the eastern part of the Po Valley Basin, onshore Italy.

Under the terms of the farm-out agreement, Orca will pay 100% of the costs of the first well up to Euro 4.3 million and 70% thereafter to complete the drilling phase. If the well is tested and completed, then Orca will earn an additional 5% by paying 100% of the testing costs up to Euro 1.3 million and 75% thereafter. Orca will also pay back costs of Euro 0.6 million.

Northern’s equity will reduce to 30% during drilling and then by a further 5% if the well is flow tested in which case Northern will retain 25%.

The principal target within the Longastrino Permit is the La Tosca Prospect. The prospect is just 2 kms to the northeast of the Alfonsine gas field and the 3D seismic that covers the prospect shows a well defined seismic amplitude anomaly within the mapped closure. The La Tosca-1 well will be drilled to an estimated total depth of approx. 2,500 metres. The well is scheduled to be drilled in 2011.

In Italy Northern has pursued a focussed approach to licencing and now holds 14 permits and 22 applications and established a position of strength. Using modern 3D seismic, Northern has interpreted the La Tosca Prospect, with 45 billion cubic feet of gross mean prospective resource. Work is being progressed to secure a well site from which to drill the well for this farm-out. The drilling of the La Tosca Prospect will target an upside of 85 billion cubic feet gross prospective resource of gas.

Northern will be the Operator during the drilling and testing phase and Orca will assume Operatorship of the permit thereafter.

Graham Heard, Exploration & Technical Director, Northern, stated: ‘We are delighted to welcome Orca as a new partner and to this permit. This third farm-out in Italy is part of Northern’s ongoing farm-out campaign which to date has involved eight permits. We look forward to further farm-outs.’

David Lyons, Orca Exploration Chairman and CEO added ‘Orca is delighted to be partnering with Northern Petroleum drilling the La Tosca well. We see this as a low risk exploration opportunity in a proven hydrocarbon basin with significant upside potential. This acquisition is Orca’s second entry into Italy which we believe has substantial reserves and has been overlooked by the major players.’

Orca plans Songo Songo boost

4 December 2010 (Source: Baklon Oil & Gas Forum )

Toronto-listed Orca Exploration says it plans to drill a new well next year to boost natural gas production at the Songo Songo field in Tanzania amid growing local energy demand.

Orca said in April it planned to raise daily natural gas production at the Songo Songo field – with 490.2 billion cubic feet of proven and probable gas deposits– by 60% by the end of 2012 to 144 million cubic feet.

The company’s third quarter report, seen by Reuters today, said there was an urgent need to expand the infrastructure that processes and transports natural gas from Songo Songo island to Tanzania’s port city, Dar es Salaam.

“During Q3 2010, gas sales from the field averaged 81.3 million cubic feet per day (MMcfd) against an installed infrastructure capacity of 90 MMcfpd,” David Lyons, Orca’s boss said in a letter to shareholders yesterday.

“We are on track with plans to drill the low risk, high potential Songo Songo West prospect in 2011,” said Lyons.

The company said it has working capital of $48 million following a fully-subscribed rights offering that raised 19.3 million Canadian dollars ($18.92 million).

“The company intends to use the proceeds of the rights offering primarily to drill the Songo Songo West exploration prospect in Tanzania in the latter half of 2011,” it said.

Orca said there was a possibility of boosting natural gas output by 40 million cubic feet per day through the expansion of existing wells.

Orca said in July it had created a new infrastructure unit called EastCoast Transmission and Marketing to help it build a natural gas pipeline network in East Africa.

The pipeline could ultimately be extended to the Kenyan port city of Mombasa and to the southern Tanzanian town of Mtwara.

Lyons said the state-run Tanzania Electric Supply Company (Tanesco) is expected to complete a $500 million project by 2014 to strengthen the transmission grid in the country.

“This will lead to increased construction of gas fired generation as Tanesco connects significant industries and consumers around Lake Victoria,” he said.

He said Tanesco was negotiating with a private power company to re-commission a 112 MW plant in Dar es Salaam, which would create a 24 MMcfpd maximum demand for additional gas by Orca.

“Power demand continues to surge,” Lyons said.

“There is increasing exploration activity offshore East Africa with four gas discoveries by Anadarko in Mozambique and by British Gas 65 kilometres from Songo Songo island offshore Tanzania.”

Tanzania has energy demand close to 900 MW capacity, but produces less than 800 MW. Only 14% of its 40 million people are hooked to the grid, while demand grows by 10 to 15% annually.

Chrispi Bakunda, Kigoma, Tanzania

Orca aims to double gas output from Tanzania’s Songo Songo fields by 2013

5 November 2010 (Source: Bloomberg)

Orca Exploration Group Inc., the largest natural-gas supplier in East Africa, plans to more than double output from its Songo Songo project off Tanzania’s east coast within 2 1/2 years.

Production should rise to 200 million cubic feet a day from 90 million cubic feet currently, Peter Clutterbuck, deputy chairman of the Dar es Salaam-based company, told the Africa Upstream oil conference in Cape Town today.

Orca plans to drill for gas in the Songo Songo West field late next year, Clutterbuck said. The field may contain 500 billion cubic feet of reserves, while the main field has about 900 billion cubic feet, he said.

– by Mike Cohen

Canadian firm raises capital for gas project

13 October 2010 (Source: Daily News)

ORCA Exploration has said that it has successfully managed to raise 19.33 million US dollars (about 29bn/-) to finance a gas project in Tanzania. The company’s Chairman who also doubles as Chief Executive Officer, Mr W. David Lyons said in a statement from Canada whose copy was availed to the ‘Daily News’ in Dar es Salaam on Wednesday that the funds were raised by the shareholders. Orca, which owns Pan African Energy, intends to use the money primarily to drill the Songo Songo West exploration later next year.

He said that part of the funds would be used to develop the energy infrastructure at the East African region through the newly formed division of Orca, EastCoast Transmission and Marketing.

“We are delighted with the success which is a big boost on our plans to expand”, he said. He said that the company which has a working capital of 47 million US dollars in its coffers said that the new funds would be mainly used to drill two low risks but high impact wells.

The funds are also intended to expedite commercialization of the company’s existing gas reserves in the country by improving the existing infrastructure. Mr Lyons further said that the company will also spend part of the money to drill a well in Italy after sorting out some legal issues regarding offshore drilling.

Orca Exploration is an international public company engaged in natural gas exploration, development and supply in Tanzania and Italy. When contacted for comments, Principal Public Relations Officer with the Energy and Water Utility Regulatory Authority (EWURA) Titus Kaguo said he was aware of the new development by the company.

“This is good news and we are waiting for them to write us officially and we will act from there,” he said, Orca also wants to construct a 600-kilometre pipeline from Dar es Salaam to Mombasa, Kenya which will be ready by the end of 2012.

Orca Plans to Raise Funds on Songo Songo Project

ORCA Exploration Group, which owns Pan African Energy, has announced the intention to raise funds through Rights Issue that would be primarily used to drill the Songo Songo West in Lindi.

The Rights Offering came after the British Virgin Islands firm received all necessary regulatory and Canadian TSX Venture Exchange approvals to raise USD 19.33 million before expenses.

Orca’s Chairman and CEO, Mr W. David Lyons, said in a release that the Rights Issue will last for one month from September 2 to October 5, this year.

“The funds will be primarily used to drill the Songo Songo West exploration prospect in Tanzania in the latter half of 2011,” Mr Lyons said adding “as well as to drill Elsa-2 appraisal well in Italy.”

Orca is an international public company engaged in natural gas exploration, development and supply in Tanzania, oil exploration in Italy and the acquisition of an additional new oil exploration opportunity in another proven hydrocarbon basin.

In addition, Mr Lyons said, some of the funds will be allocated to the development of energy infrastructure in East Africa through the newly formed division of Orca, EastCoast Transmission and Marketing.

Energy and Water Utility Regulatory Authority (EWURA) Principal Public Relations Officer, Titus Kaguo told the ‘Daily News’ that they know Orca Exploration through its gas subsidiary Pan Africa Energy.

“The company is regulated by EWURA like any other natural gas company on downstream while for upstream the firm is regulated by TPDC,” Mr Kaguo said yesterday.

Stakeholders have it that the USD 19m, however, is not enough to satisfy drilling operations and construction of infrastructure if the company wishes to do so. Mr Lyons said during the second quarter of this year, Orca’s gas production and marketing in Tanzania generated funds flow of USD4.9 million, a 96 per cent increase compared with the same period in 2009.

He predicted gas sales volumes to increase further in the third quarter of this year “as there is greater demand for gas in electricity generation, as the country’s hydro generation output declines during the dry season.”

Meanwhile, Orca also wants to construct a pipeline from Dar es Salaam to Mombasa which is estimated to cover about 600 kilometres through the cost line. The company is an active participant in the project led by Songas Limited to maximize the capacity of the existing system to 140 MMcfd through the construction of new processing trains and the optimization of pipeline pressures.

“This is forecast to be operational by the end of 2012,” Mr Lyons said. Orca also announced the creation of a new infrastructure division, EastCoast Transmission and Marketing which its first project being evaluated is the feasibility of a 207 kilometres onshore pipeline that could run parallel to the existing onshore pipeline from the Songo Songo field area to Dar es Salaam.

Coming soon: Dar-Mombasa gas pipeline

August 2, 2010 (Source: the EastAfrican)
– Abduel Elinaza

Canada’s Orca Exploration Group is planning to construct a natural gas pipeline from Dar es Salaam to Mombasa — a project that should significantly reduce the cost of energy, and hence the cost of doing business, in Kenya.

The 600-kilometre pipeline from Dar es Salaam through Tanga to Mombasa will carry natural gas from the Songo Songo island and from the Mnazi Bay gas fields in southern Tanzania near the border with Mozambique.

Orca Exploration chairman and chief executive officer David Lyons said last week that the group is currently carrying out a feasibility study at its own cost.

Mr Lyons said markets for natural gas are opening up in East Africa and there is significant potential demand from the power sector.

“We are looking forward to working with partners to increase throughput and extend the pipeline network to reach new markets. This will benefit not just Orca but also others who can then develop their gas discoveries in Tanzania,” he said.

Orca’s newly created infrastructure division, East Coast Transmission and Marketing, incorporated in the British Virgin Islands, is currently in discussion with potential pipeline expansion partners and is keen to have a significant East Africa finance component as part of the infrastructure project.

Orca has undertaken some preliminary engineering studies for the construction of the pipeline to Mombasa, which is likely to run along the coast — north to Mombasa and south to Mtwara to link up with the Mnazi Bay gas project.

Meanwhile, a parallel East African Community feasibility study for the same onshore route is currently ongoing. The EAC has engaged a team of consultants from Cowi (Denmark), Cowi (Tanzania Ltd) and Runji & Partners (Kenya) to carry out the study.

Senior energy officer at the EAC Peter Kinuthia, told The EastAfrican in Arusha last week that the study kicked off on July 5 and is due to be completed in February 2011.

Mr Kinuthia said the EAC will be holding the inception workshop this month (August) to firm up the methodology, with programme and consultation workshops to engage the stakeholders and the feasibility study to, among other things, package the project for the construction phase.

“The EAC is aware of the Orca undertaking and that the company is undertaking a similar study at its own cost,” he said.

Orca, with 16 years’ experience of working in Tanzania, is currently in discussion with potential pipeline expansion partners and has appointed Pierre Raillard, Orca’s in-country manager in Tanzania, to run the East Coast Transmission and Marketing division.

New division’s focus

Orca, which has undertaken some preliminary engineering studies for this section, said the new division will initially focus on twinning of the existing 207-kilometre onshore natural gas pipeline system transporting Songo Songo gas to Dar es Salaam from Somanga Funga, where the marine pipeline from the Songo Songo gas field connects to the mainland.

The currently installed pipeline has a throughput capacity of 90 million cubic feet per day; Songas Ltd is planning to expand the throughput to a peak of 140 million cubic feet per day by January 2013.

Orca is an international public company with a turnover of $8.2 million engaged in natural gas exploration, development and supply in Tanzania and oil exploration in Italy.

In his keynote address to the 3rd East African Community Investment Conference held in April this year, Ugandan President Yoweri Museveni said that transport and electricity are East Africa’s most pressing problems.

“The cost of electricity in East Africa is now five times more than in China,” President Museveni told hundreds policymakers, business leaders and international investors.

Droughts in East Africa in recent years have had a severe impact on the hydroelectric facilities in the region, with Kenya, Uganda and Tanzania in particular suffering from persistent power shortages.

The region is therefore seriously exploring alternatives to hydropower.

Orca Exploration creates new infrastructure division

Monday, July 19, 2010 (Source: Datamonitor)

Orca Exploration Group has created EastCoast Transmission and Marketing as the new infrastructure division of the company.

Orca is currently in discussion with potential pipeline expansion partners and is keen to have a significant East Africa finance component as part of the infrastructure project, the company said.

EastCoast Transmission will initially focus on expanding the onshore natural gas pipeline system transporting Songo Songo gas to Dar es Salaam. This will reportedly require the twinning of the existing 207km pipeline from Somanga Funga, where the marine pipeline from the Songo Songo gas field connects to the mainland, to the pipeline’s current terminus at Dar es Salaam.

Orca has undertaken some preliminary engineering studies for this section. It is expected that the pipeline could be extended along the coast, north to Mombasa and south to Mtwara near the border with Mozambique near the Mnazi Bay gas discovery, the company added.

David Lyons, chairman and CEO of Orca Exploration, said: “The time is right to move on this expansion. The markets for natural gas are opening up in East Africa and there is significant potential demand from the power sector. However infrastructure remains a bottleneck that urgently needs to be addressed.”

A service of YellowBrix, Inc.