Mtwara gas and potential lives of Tanzanians

By Athumani Shariff
What are the potential benefits for Tanzanians? And What shall be the direct significances of the projects to the residents of Mtwara?  These are major questions that everyperson who is well-minded within and outside the country could ask following the construction of gas pipeline from Mtwara to Dar es Salaam city in Tanzania East Africa
      Tanzania signed acontract with three Chinese companies on July 21st to immediately start construction of a 512-kilometre pipeline from Mtwara to Dar es Salaam, according to Ministry of Energy and Minerals Permanent Secretary Eliakimu Maswi.
      The project will cost Tsh1.86 trillion (USD1.2 billion), and is funded by a loan from the Export-Import Bank of China. Construction is expected to be completed within 18 months.

President Jakaya Kikwete opening the construction of Mtwara gas
at Mnazi Bay Mtwara

      The plan involves building a 36-inch pipeline for 487 kilometres and a 24-inch pipeline for 24 kilometres, connecting the mainland to the gas source on Somanga Fungu, a small island in the Indian Ocean.
      This is said to be the biggest gas project ever in East and central parts of Africa. It involves different companies to acomplish the work before January next year according to the contract. China Petroleum Technology Development Corporation, Petroleum Pipeline Engineering Bureau and China Petroleum Pipeline Engineering Corporation are the three companies which have been awarded the contract to set up the pipeline.
      According to the Ministerof Energy and Minerals, about 0.3 per cent of charges from sale of natural gas will remain in the regions of Mtwara and Lindi which are the host sources of the gas. Residents also stand to benefit from more social services and amenities like schools, dispensaries, water and electricity that will likely follow the arrival of investors. And youth in Mtwara and Lindi will receive training in gas and oil-related disciplines at Vocational Education Training Authority centres.
      The major challenge of the project were fatal riots over the pipeline by Mtwara residents who wanted to see the newly discovered fuel stimulate their local economy before being transported across country. The reason is that, the local people Mtwara did not fully involved in the whole process. The government was suppose to involve them because are the ones who live with the resources.
      Tanzania has currently licensed 16 international energy companies to search for oil and gas. British gas firm BG Group, Norway's Statoil, Brazil's Petrobras, Royal Dutch Shell and Exxon Mobil Corp are among companies already operating in Tanzania.

pipes and carterpilaras alonside to the bicons of where the gas pipeline contruction will take place

Natural gas deposits in Tanzania are estimated at 41.7 trillion cubic feet (tcf) while Mozambique estimates to have 87 trillion cubic feet of recoverable reserves. Jointly, Mozambique and Tanzania have potential to be the third largest natural gas exporters in the world. British firm BG Group and Stat oil of Norway is planning to build a US$10 billion East African liquefied natural gas (LNG) terminal well placed for exports to Asia, after the Norwegian company made a new find off the coast of Tanzania.

     According to IMF countryreport 2012 says that with the construction of the natural gas pipeline, savings from low cost gas power generation would be passed on to industrial and other users, raising Tanzania's competitiveness and growth prospects. The report shows that the construction of the 1.92trillion/- pipeline shall have broader economic benefits as a shift to low cost gas power generation will reduce electricity tariffs. Savings would be passed on to industrial and other users, raising Tanzania's competitiveness and growth prospects.

     With all that good promises from Government officials yet, the local people are worried whether they shall be considered to be given jobs.

     According to Maswi, the gas used to generate electricity currently costs USD0.42 (663 shillings) per MW.

"But with this pipeline in place, it is unbelievable," he said. "The cost of the same gas, enough to produce a unit will drop to USD0.02, almost 32 shillings, after completion of the construction. This is going to mean a lot to the Tanzanian economy."

      Since 2006, Tanzania has experienced periodic power rationing, which Maswi says he hopes will be resolved when this project is completed and production begins.

      Yona Killagane, director general of the Tanzania Petroleum Development Corporation (TPDC), said the new pipeline will have the capacity to transport 784 cubic feet of gas per day, which will generate 3,920 megawatts of electricity.

      Tanzania's current demand is 720 megawatts per day. Therefore, by generating 3,920 megawatts through domestic gas reserves, the country will have a surplus of more than 3,000 megawatts to be used for export or to develop new industries, Maswi said.