Power plants are not simple things; building multi-thousand MWs of new capacity requires huge sums of investment, as well as a long time to develop and construct. One needs long-term planning in place to make it happen in the following years. In terms of power generation, there is a model that has been applied in many countries around the world. Under this system, private companies invest in power generation and then operate the plant and sell electricity to the off-takers. This means the government and off-takers do not have to commit large sums of money to build the plant. There are developers that are willing to do this, and they can offer competitive terms and run plants efficiently. The IPP model has been extremely effective in many parts of the world. Regarding Tanzania in particular, Songas stands out as a fantastic success story for Tanzania. We have been operating since 2004 and produce 180MW of electricity. Our availability over the last few years has been around 96%, and our load factor is upwards of 85%, so whenever TANESCO asks us to generate, we can deliver reliable power. We are also inexpensive; in fact, we are the cheapest thermal power plant in East Africa.
Jan. 3, 2018
Managing Director, Songas
Country Chairman, Pan African Energy
Until a few years ago, Pan African Energy was the only gas supplier in Tanzania, but there are now a couple of new entrants on the market, and another is expected to enter the gas market in the next few years. Pan African Energy has, since 2004, been operating and further developing the Songo Songo Main gas pool. There is another pool, which we do not think communicates with ours, under the northeastern side of Songo Songo Island where Ndovu Resources, a subsidiary of Aminex PLC, produces a small amount of gas. This gas passes through the Tanzania Petroleum Development Corporation's (TPDC's) gas processing plant on Songo Songo Island and through TPDC's Mtwara-Dar es Salaam pipeline to TANESCO's Kinyerezi and Ubungo power plants. Looking ahead, we expect the demand for gas to continue growing, mainly due to the ongoing, phased construction of the Kinyerezi power plants, which will result in the installation of several hundred megawatts of new power generation capacity over the next several years. We also expect gas demand by industries to continue growing. Recent discoveries of more gas in the Ruvuma and Ruvu basins, the latter discovery being only about 70km west of Dar es Salaam, should give everyone some comfort that gas demand in the medium term may be met from onshore and near-shore gas reserves.
David Mestres Ridge
CEO, Swala Oil & Gas Tanzania
We started 2016 with three assets: Burundi, the Pangani basin, and Kilosa-Kilombero. Our first asset is block D in Burundi, now conceivably closer to an export terminal following the Tanzania-Uganda pipeline approval. We requested to withdraw from Pangani back in February 2016 because there was no technical or commercial reason to continue. At Kilosa-Kilombero, we completed the technical work and were at the stage of bringing in piping and long-lead items, leaving them in storage with a view to start drilling at the end the year. However, we faced delays with permits and then we entered the rainy season and thus decided to postpone by requesting a licensing extension. We now have a 75% participating interest, with the remaining 25% being held by Tata Petrodyne Limited. The plan is to drill in October or November 2017; in the interim, we will prepare the site, which will require a fair amount of civil work. The overall prospective resources net to Swala is currently estimated at 110 million barrels. That being said, one challenge here is the disconnect between participatory organizations and the level of overlapping bureaucracies one must deal with. However, we work closely with the TPDC, which has been our ally in lobbying for solutions to some of these challenges.