Trials for mass production of gas for domestic use and to power motor vehicles are underway following the commissioning yesterday of a $35 million (Sh46.2 billion) plant in Dar es Salaam, in a major joint venture between the Government and the private sector.

The key players in the project that is expected to halve the cost for consumers are the Tanzania Petroleum Development Corporation (TPDC), and Pan Africa Energy, the owners of Songas, a major supplier of natural gas.

The new plant, which is expected to start commercial production by September on a pilot basis, will convert natural gas for ready use by households and motorists in a major step towards green energy production. The new compressed gas will provide competition to the current petroleum products and LPG dealers.

The TPDC director of marketing and investments, Mr Dismas Fuko, said that under commercial production by the new plant, the cost of the gas would be 45 per cent lower than the prevailing minimum petroleum and cooking gas prices.

He said that if the minimum price of petrol would be, say, Sh1,000 a litre, then the price of gas of a similar quantity would be Sh550. "Our aim is to reduce the cost of energy and make it affordable for consumers," he said

Besides being cheaper, the gas product will also be a boon to the environment as it will produce less green house emissions.

The first phase of the project, to cost over $3 million (about Sh4 billion) , is expected to benefit a number of households and power 200 vehicles in Dar es Salaam.

Speaking during the launch that was however marred by protests by people who live near the Songas electricity generating plant at Ubungo, the minister for Energy and Minerals, Mr William Ngeleja, said the project was one of the Government's major investments to boost energy supply and cut the fuel import bill.

The demonstrators, carrying placards, were complaining about delay in paying compensation to enable them to move and settle further away from the electricity generating plant. Experts have recommended their relocation to avoid health and environmental problems associated with the gas processing.

The initial production of cooking gas will be channelled to the city centre to supply tourist hotels, while two filling stations will be erected at Ubungo and Mikocheni to serve motorists. Dar es Salaam Institute of Technology has started modifying motor vehicle engines to enable them to use gas.

On completion, the minister said, the project would comprise a 45km pipeline to serve 38,000 houses and 8,200 motor vehicles.

Mr Ngeleja said the use of gas for cooking and motor vehicles would reduce dependence on firewood, charcoal and petroleum products, whose prices are exorbitant.

"This is one of the most important projects to take the country to the next level. We are going to save more foreign currency, would otherwise be used to import petrol and diesel."

The University of Dar es Salaam (UDSM) and Eco Motors Ltd, in collaboration with DIT, are the consultation for the conversion of motor vehicle engines to use gas.

According to the TPDC director-general, Mr Yona Killagane, the Government has saved over Sh4.33 trillion in the past five years because of using gas.

Mr Killagane said that over Sh1.85 trillion ($1.42 billion) in foreign exchange was saved, which could have been used to buy 2.6 billion litres of oil.

He also said the Government had earned Sh96.59 billion ($74.3 million) from gas. "We have also reduced carbon dioxide emissions by 1.94 million tons," he said.

The Pan African Energy Tanzania Ltd managing director, Mr Pierre Railard, said the new plant has a capacity of compressing 1,000 cubic metres of gas an hour, or 820 kilogrammes of gas. This is equivalent to 1,230 litres of petrol.

"This Canadian technology can produce gas for 20 motor vehicles an hour, with each consuming 40 kilogrammes of gas, which is equal to 60 litres of petrol or powering 240 cars in 12 hours," he said.

But as the minister and the other officials were celebrating the milestone, protesting Ubungo residents demanded an explanation on on the whereabouts of the Sh2.2 billion compensation promised by the Government five years ago.

Ubungo Kisiwani leader John Ndimbo led the demonstration, which took the minister and other officials by surprise. The representatives of 137 households carried placards urging resolution to their problem.

"We are here to seek audience with the minister. He should tell us if we are going to be compensated or not," Mr Ndimbo said amid cheers from protesters.

But Mr Ngeleja pleaded with the residents to remain calm, saying the issue was being addressed despite the current difficult economic times.