20 October 2012

Tanzania: No Immediate Plans to Export Gas - Sefue

Photo: Capital FM
A natural gas plant (file photo).

TANZANIA has no immediate plans to export its natural gas even as it boasts some reserves of 3 trillion cubic feet, until it meets local demands which, among others, include power generation and industrial use.

Chief Secretary Ambassador Ombeni Sefue made the remarks in Dar es Salaam while addressing reporters shortly after a meeting with high-level scoping mission, that visited the country with the aim of exchanging notes on successes and challenges in natural resource management.

"We must meet the domestic demand first. The available gas will also be used as a raw material for petro-chemicals and fertilizer industries," Ambassador Sefue said.

He said although the gas reserve is sufficient for local demand, the country cannot be ranked yet as one of the major gas producers.

Ambassador Sefue noted that the government was currently training local experts who would also help negotiate well with investors in the energy sub-sector.

The mission which was invited by Tanzania comprised representatives from the African Development Bank (AfDB), China and UK's Department for International Development (DFID).

Other members of the mission were from the World Bank, the International Monetary Fund (IMF), the European Union (EU) and Germany, all working together in the spirit of the Paris Declaration on donor coordination and harmonization.

According to Ambassador Sefue, the private sector and government can cooperate to enable Tanzanian businesses and individuals to supply goods and services to natural gas projects.

He, however, cautioned that for local entrepreneurs to venture in the sector, they would need support to ensure that gas and its related activities contribute to a diversified economy.

Speaking on the same occasion, World Bank Sector Manager for Africa Region, Mr Albert Zeufack, said natural gas is part of the solution to Tanzania's energy crisis and is essential for diversification of the economy.

"Natural gas is an opportunity for the current generation to pass a proud and prosperous Tanzania to the next generation. It will, however, not turn Tanzania into a gas-rich country overnight," Mr Zeufack said.

The WB executive said it was high time the government put in place a predictable framework ahead of major future investments in natural gas.

He also noted that while substantial revenues from the sub-sector may take about 10 years to flow, essential regulatory, fiscal and commercial steps must come before project development can proceed.

"There is also a need to build the capacity to implement and develop human capital through the education system on general, technical and vocational training, in a bid to make it demand driven and thus avoid skills mismatch," he explained.

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