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The East African : Sep 29th 2014
50 ELECTRICITY GENERATION Building of gas power plant on course Tanzania says 70 pe≥ cent of the plant and pipeline have been const≥ucted By BARBARA AMONG Special Correspondent tion of gas-fired power plants and 500km gas pipeline in December to address shortage of power supply. According to officials from the T Tanzania Petroleum Development Corporation, 70 per cent of the Mnazi Bay and Songo Songo natural gas processing plants and a transportation pipeline have been completed. Infrastructure at the Mnazi Bay and Songo Songo, which will see a combined 244 million cubic feet of gas delivered per day will result in generation of 900MW of power by December this year and would progress to generate an estimated 3000MW of power next year. The project also involves the ongoing laying of a 500 kilometre pipeline of between 24 and 36 inch diameter from Mnazi Bay in Mtwara town and another from Songo Songo in Lindi region. The pipeline from Somanga to Dar es Salaam will have capacity to transport 210 million cubic feet of gas a day compared with the current 105 million cubic feet by an existing pipeline from Songo Songo to Dar es Salaam. The 16 inch pipeline is owned by private investors and lacks the capacity to meet the growing demand. “The project, which involves the construction of gas plants, the pipeline and power generation plant is ongoing and will be completed by December 2014,” said TPDC spokesperson Francis Lupokela. Athanas Mtemi, an engineer with TPDC said the firm expects to generate 220 million cubic feet per day from Mnazi Bay and Songo Songo he Tanzanian government hopes to complete the construc- The EastAfrican BUSINESS SEPTEMBER 27 - OCTOBER 3, 2014 Fi≥ms get licences to open shop at EPZ By HELLEN NACHILONGO Special Correspondent THIRTEEN local and foreign companies have been allowed to start operations at the Export Processing Zone in Tanzania. According to Economic Processing Zone Authority director-general Dr Adelhelm Meru, once the operations start, about 2,346 jobs will be created and $78.35 million will be generated in the first year. Investors have completed the required procedures and have been given licences to start production, he said. Dr Meru said the companies will invest in various areas, which include meat processing and packaging, horticulture, cashew nuts production. Foreign companies that have Power plant at Songo Songo. Picture: File 140 million cubic feet per day. Mr Mtemi said large diameter of the pipeline means it can accommodate more gas production in future. This, he said, will increase more power generation for both domestic and industrial use. The project, which is projected to cost $1.23 billion, is expected to help the country meet its power needs. Tanzania’s economy is losing at least $1 billion per year for using imported oil. According to Thomas Mhando, an engineer with TPDC at Mnazi Bay, the gas processing plant project will be the first point where the gas arrives before it is transport $1b By HELLEN NACHILONGO Special Correspondent A NORWEGIAN company Yara International is analysing business environment between West and East Africa to build a gas plant once gas projects come on-stream. According to Yara Tanzania managing direc- tor Pal Oystein, $2.5billion for the construction has been set aside ready for investment once the site where the plant will be built has been identified. “Both regions are endowed with either gas or oil, and so we have to establish a good environment before we commence construction,” he said. Currently, Yara is in talks with governments of Tanzania, Angola, Ghana, Nigeria and Mozambique over building of a worldclass urea factory to produce for African and foreign mar- to Somanga, where it will be mixed with that from Songo-Songo. At the Mnazi Bay plant, the gov- ernment is also building an effluent treatment and disposal plant. Tanzania’s gas reserves, which have been discovered stand at 50.5 trillion cubic feet. Besides production of power, the country plans to export the gas to other countries. The Mnazi Bay area has four wells while Songo Songo has two wells that will be used to produce power. The pipeline project is being con- Amount of money Tanzania spends per year in importation of oil used for power generation. structed by China National Petroleum Corporation and financed by a loan from China’s Exim Bank while the gas plants are owned by TPDC and the government has hired Worley Parsons as consultants for the gas plants. About 18 per cent of Tanzanians have access to electricity and power consumption is growing at eight per POWER GENERATION Hydro power plants contribute only 17 per cent, gas plants contribute 45 per cent and Llquid fuel plants contribute 38 per cent. The Southern region, which has the gas wells and where the pipeline for transmission is located is one of the regions with limited access to electricity. Mtwara resident rioted early this year against the construction of the pipeline to Dar es Salaam, seeking a bigger share of benefits from gas cent per year. Tanzania’s installed capac- ity stands at 1,438MW with 35 per cent of that power coming from gas-fired power plants. Fi≥m sets aside $2.5b to build gas, oil plants kets. Nigeria is the largest oil producer in Africa followed by Agola, which has already warned that it will not reach an output target of 2 million barrels a day next year because new projects will be too late to boost declining flows. “The aim of Yara is always searching for op- portunities to grow its business. Natural gas is the most important raw material in Yara’s production, so the exploration of resources taking place in several African countries is a natural opportunity for Yara to examine. It is, however, too early to say if and where this will materialise,” he said. He said while the development of gas in any country depends on infrastructure, investment in food production needs modern technology, which comes in form of fertilizer. Mr Osytein said Yara is currently investing in A gas power plant under construction in Tanzania. Picture: File African countries specifically in fertilizer production to boost agriculture sector. According to Mr Oystein, in the next three to five years, Yara will also spend $150,000 in production of cotton, maize and rice in the lake zone of Tanzania. been awarded licences are from India, Germany and Holland. The EPZA started the total sales turnover is about $746 million for all the 128 companies. Dr Meru said the entry of new investors is expected to boost Tanzania’s exports and increase the country’s foreign exchange earnings. It is also projected that by June next year two to three new investors would start production. Over the past five years, Tanza- nia has generated Tsh675 billion ($450 million) net profit from goods exported from Special Economic Zones (SEZs). Catagory of companies The companies have been cat- egorised in three groups based on percentage of ownership with local investors leading at 44 per cent. According to Dr Meru, foreign companies constitute 41 per cent investments in SEZ, while the last category which is composed of both local and foreign joint investments has 15 per cent. EPZ data shows that over Tsh 1 trillion ($700 million) worth of investments have created 14,000 direct jobs with over Tsh700 billion ($450 million) realised from export since the EPZ scheme became operational in 2002. The EPZ programme was es- tablished following enactment of processing Zone Act 2002, to provide for establishment of export oriented investments within designated zones Tanzania had set aside 16,150 hectares of land for the development of Special Economic Zones in three of its cities in an attempt to attract investment. A group of potential inves- tors from 22 South Korean firms in April visited the authority to learn about opportunities available in Tanzania and benefits of investing in EPZA areas.
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