21 May 2018

Tanzania: How Gas Can Slash Costs

Dar es Salaam — Using liquefied natural gas (LNG) for cooking is proving to be cheaper than any other source of energy.

Consumers have reported saving up to 50 per cent of what they used to spend on liquefied petroleum gas (LPG).

The amount they are spending on LNG is also around a quarter of what they spend on charcoal for cooking per month.

In fact, households using charcoal spend twice as much as those who currently use LPG as cooking fuel.

This testimony was provided by Ms Enerica Nyinje, a resident of the Mikocheni, Dar es Salaam, who is among two householders that were recently connected to what is already known as the "Mikocheni (natural gas) Pipeline".

With a family of five, Ms Nyinje said she used to spend Sh20,000 to buy 6kg of LPG per month, but since she was connected to LNG, her cooking energy costs have dropped to Sh5,000 in the last two weeks - and she hopes to spend Sh10,000 a month.

"One unit of natural gas is sold for Sh1,000, and I bought only five units to begin with. I am starting to believe that Sh10,000 will be enough to purchase prepaid (LNG) energy for the whole month," she said.

LNG connection to the two households is part of the plan by Tanzania Petroleum Development Corporation (TPDC) to roll out infrastructure for supplying natural gas for domestic use in the country.

Energy minister Medard Kalemani has confirmed that more than 1,000 households in the city's Ubungo Maziwa, University of Dar es Salaam, Sinza, Makongo Juu, Survey, Shekilango and Mikocheni areas are slated to be connected to LNG supplies in the next two years.

Dr Kalemani also said that the average savings from using natural gas can be up to 40 per cent compared with other energy sources, including LPG and charcoal.

Plans to connect up consumers were hatched four years ago, but only about seventy households were connected during the pilot phase.

TPDC says is currently constructing a pipeline infrastructure to the targeted areas of Dar es Salaam so that their homes can be connected to LNG supplies. TPDC is implementing the project to directly connect the "Mikocheni pipeline" straight from natural gas sources - including Mandimba and Songosongo - at a total cost of Sh4 billion. The project is scheduled for completion in September this year.

TPDC calculations are that a Tanzanian household of between six to eight people can save up to Sh65,324.39 in a month by using natural gas as source of cooking energy, instead of charcoal.

For example, it would cost only Sh30,000 a month for a household that consumes 30 cubic metres of natural gas - compared to Sh92,177.7 for one that uses 90kg of charcoal during the same period.

A TPDC report shows that, in 13 years, the government has saved $401,176 as a result of using natural gas in institutions, households and motor vehicles.

"This is just the first phase of the government's agenda to connect up the whole country with natural gas for cooking, covering the areas highlighted above - and another 850 households in the Lindi and Mtwara regions," the corporation's report reads in part.

The second phase of the project will start in July this year, whereby natural gas supply infrastructure to Kigamboni, Mbagala and Mkuranga will be constructed.

The entire phase is projected to cost Sh11 billion out of the Sh1.2 trillion that the government has set aside for countrywide LNG connection project.

The TPDC acting managing director, Mr Kapuulya Musomba, said that the two households which were recently connected to LNG supplies - including that of Ms Nyinje - bring to 72 the households that have been successfully connected up.

He also revealed that two industries in the Mikocheni area will also be connected to natural gas supplies, making a total of 39 industries that have been connected to natural gas supplies for lighting and heating countrywide.


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