Tanzania turns to natural gas as hydropower struggles
DAR ES SALAAM, Tanzania, Sept 24 2014
Dubai firm makes big Tanzania natural gas find
Reuters, Dubai Monday, 28 March 2016



Dubai firm makes big Tanzania natural gas find
Reuters, Dubai Monday, 28 March 2016
The Dubai-based Dodsal Group has made a major natural gas discovery in Tanzania and plans to invest an additional $300 million in the country over the next 24 months to support exploration and production there, it said on Monday.
The discovery in the Ruvu Basin near Dar es Salaam is estimated to contain over 2.7 trillion cubic feet (TCF) of natural gas deposits with a value of $8 billion to $11 billion at current market prices, Dodsal said. 

The company described the find as Tanzania’s biggest onshore gas discovery, saying it would boost the nation’s total estimated recoverable natural gas reserves to more than 57 TCF. Most of Tanzania’s gas discoveries have so far been made in deep-sea offshore blocks.

In addition, a third Dodsal well at Mbuyu in Tanzania has found a large gas column which is estimated to contain up to 5.9 TCF of gas, the company said, adding that studies of the deposit were underway.
Tanzania turns to natural gas as hydropower struggles
DAR ES SALAAM, Tanzania, Sept 24 2014 (Thomson Reuters Foundation)
Currently, natural gas accounts for about a third of Tanzania's electricity generation, with hydropower and liquid fossil fuel contributing in roughly equal measures to the balance.

TANESCO the state-run utility firm:  Eliakim Maswi, permanent secretary Ministry for Energy and Minerals: Aggreko and the U.S-based Symbion Power
Evans Mzava, an independent researcher and energy consultant based in Dar es Salaam.  TANESCO managing director Felchesmi Mramba new gas-fired turbines

After decades of relying on supplemental private power generating plants to make up hydropower shortages, Tanzania will replace them with natural gas-fired turbines as the nation taps its big reserves of natural gas to generate cheap electricity.  Amid recurring droughts that have crippled the operations of the country's major hydropower facilities, the East African nation is trying to diversify its energy sources - but potentially at the price of higher carbon emissions. 

TANESCO the state-run utility firm
The move to turn off furnace oil-powered generators is likely to save TANESCO, the state-run utility firm, 1.6 trillion Tanzanian Shillings ($1 billion) a year, the government said.

Eliakim Maswi, permanent secretary Ministry for Energy and Minerals
Eliakim Maswi, permanent secretary in the Ministry for Energy and Minerals, said the move aimed to cut costs and allow Tanzania to use its own gas resources.  "We want to ensure that we have reliable and available power supply at the lowest cost so that the public can enjoy lower tariffs," he said.  Tanzania has for some years suffered from prolonged drought that has affected its hydropower capabilities. Shortages have led to power rationing.

Aggreko and the U.S-based Symbion Power
To deal with the problem, the government hired private companies including Aggreko and the U.S-based Symbion Power to generate more than 300 megawatts of power daily on a short-term basis - about a fifth of the country's electricity needs.

Symbion Power Dar es Salaam, Arusha and Dodoma
Symbion has since 2012 expanded its power generation activities in the country to produce about 225 megawatts daily at its plants in Dar es Salaam, Arusha and Dodoma.

Tanzania's first natural gas-fired plant, Kinyerezi in Dar es Salaam
That generating capacity will now be replaced by other facilities, including Tanzania's first natural gas-fired plant, the government said. The 240 billion Tanzanian shilling ($183 million) plant being built at Kinyerezi in Dar es Salaam is expected to meet some 20 percent of national electricity demand.
 
SWITCHOVER THREAT?  Local analysts, however, warned that the switchover could hurt the economy.  "From what I know, TANESCO has entered lengthy agreements with those (private) companies. I am sure they will not be standing idly by to see their lucrative deals scrapped. They will definitely unleash a fierce legal battle against any move to terminate their contracts," said Evans Mzava, an independent researcher and energy consultant based in Dar es Salaam. 
Maswi, of the energy ministry, said government will not violate any contractual terms with private companies.  Tanzania has proven reserves of natural gas in excess of 50 trillion cubic feet - more than enough to put the country on a faster economic development path and help it build energy independence, the government says.  Currently, natural gas accounts for about a third of Tanzania's electricity generation, with hydropower and liquid fossil fuel contributing in roughly equal measures to the balance.
 
The government has pushed ahead with expanded use of fossil fuels.
Although environmental experts warn that increasing use of fossil fuels to generate electricity will increase emissions and contribute to climate change and more extreme weather, the government has pushed ahead with expanded use of fossil fuels.
In its 2014-25 Electricity Supply Industry Reform Strategy Roadmap, launched early this year the government said it would use a variety of sources of energy, including coal and gas, to increase electricity generation from 1,583 megawatts (MW) today to 10,800 MW in the next 10 years.

Domestic and industrial energy consumers faced a 40 percent increase in electricity tariffs earlier this year as a result of what the government said was the rising cost of producing electricity.

TANESCO managing director Felchesmi Mramba new gas-fired turbines
According to TANESCO managing director Felchesmi Mramba, commissioning new gas-fired turbines will substantially lower energy costs as it will allow TANESCO to operate more efficiently and provide sufficient energy without buying from the private market.

Currently, only 24 percent of Tanzanians are connected to the grid. In rural areas, only 7 percent of people have electricity due to low purchasing power. The government aims to increase the connection level to 30 percent by the end of 2015.

Mramba, of TANESCO, said energy demand in Tanzania is expected to grow at 8 percent a year for the next three years. 
 (Reporting By Kizito Makoye; editing by Laurie Goering)