19 March 2018

Tanzania: Gas Saves Sh8tr in Three Years

Dar es Salaam — The use of domestically produced natural gas in Tanzania has resulted in Sh8 trillion in savings to the economy over the last three years alone.

This brings to Sh23.14 trillion the savings that have been made since the country started to use natural gas in industrial production and energy generation some 13 years ago.

In that regard, the Tanzania Petroleum Development Corporation (TPDC) says this has to a great extent reduced the country's dependence on heavy furnace oil (HFO), diesel, petrol, jet fuel and other fuels in operating machineries.

A TPDC researcher, Mr Aristides Katto, said the use of locally-produced natural gas has not only saved funds, it has also increased the country's energy sources, and stimulated economic activities all round.

For example, Mr Katto said, Tanzania saved $6.7 billion in 2015 alone, after turning away from HFO and diesel to natural gas to generate electricity.

Industries which decided to use natural gas as a source of energy saved about $653.48 million as a result in 2015, while other institutions which also switched to using natural gas made savings amounting to $278,455 in the same year.

If nothing else, all these savings are ample testimony to how the use of natural gas can boost economic growth for the country, Mr Katto said, adding that "the figures also show that gas can promote the growth of other sectors of the economy".

"As a country gearing up for industrialisation, Tanzania should bank on natural gas as one of the basic ingredients to making the (industrialisation) drive a success," he added.

According to TPDC records, the demand for natural gas has doubled from a total of 145 million standard cubic feet (mcf) per day in 2016 to 300mcf last year.

But, according to a report by the New York-based Natural Resources Governance Institute (NRGI), the market outlook dims Tanzania's hopes that its offshore gas will become a driver of future economic growth and development.

Tanzania has 57 trillion cubic feet (tcf) of proven but largely undeveloped natural gas reserves, from which it expects to reap close to $5 billion annually in gas exports revenue through the proposed liquefied natural gas (LNG) plant.

A greater proportion of the gas will, of course, be allocated to domestic power, cement and fertiliser industries.

The TPDC acting managing director, Mr Kapuulya Musomba, noted that, "at the moment, gas supply is ahead of demand. But, we are working to meet the needs as per the industrialisation plan."

He also revealed that TPDC is currently carrying out a study to map out gas demands across the country.

So far, at least 42 industries have been connected to the natural gas supply system - although only 37 are fully using this source of energy. Also, two non-industry institutions are using natural gas at the moment, while only 70 houses have already been connected to the natural gas pipeline, which runs from Ubungo to Mikocheni in Kinondoni District, Dar es Salaam.

So far, only one compressed natural gas (CNG) vehicle filling station, and two vehicle conversion institutions (one at BICO-UDSM, and the other at DIT along UWT Road in Dar es Salaam city) are in operation. In addition to that, TPDC plans to construct 15 CNG vehicle filling stations.

"Under this project, we envisage to have 15 refueling stations which will be able to accommodate 8,000 vehicles, and connect 30,000 households," Mr Musomba managing director said, noting that the project is wholly-owned by TPDC.

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