GO NORTH YOUNG MAN

Tanzania 2018 | ENERGY | INTERVIEW

TBY talks to Kapuulya Musomba, Acting Managing Director of Tanzania Petroleum Development Company (TPDC), on the planned expansion of the Mtwara-Dar es Salaam natural gas pipeline, entering northern industrial hubs, and empowering nascent industries.

 Kapuulya Musomba
BIOGRAPHY
Kapuulya Musomba has been the acting Managing Director of the Tanzania Petroleum Development Corporation (TPDC) since September 2016. Prior to that, he worked for TPDC in various capacities, including as project manager and petroleum engineer. He holds an MSc in petroleum engineering, specializing in drilling and production, from the Norwegian University of Science and Technology, and a BSc in mechanical engineering from the University of Dar es Salaam.

What have been your most recent upstream projects?

TPDC is currently in the appraisal stage for discoveries made in 2010. The government formed a negotiating team to work on our LNG projects in 2016. Since then, we have hosted a series of meetings with international oil companies (IOCs) to agree on the corporate governance and administrative elements of these endeavors. On the technical side, after some investigation by the IOCs, we have earmarked an area of focus, Likong'o in Lindi, and preparations are now underway. There is much to consider: feasibility studies, investigations into environmental impacts, compensation assessments, and land ownership nuances, among others. Currently 50-60% of the national grid is supplied by gas; therefore, TPDC and its partners are a cornerstone of the nation's economy.

What opportunities are there for investing in the planned expansion of the Mtwara-Dar es Salaam natural gas pipeline?

Tanzania's recent power problems are common knowledge. In 2011, the ongoing power shortage led the government to construct a pipeline to join gas from different fields, facilitating supply and balancing distribution. The first phase was the Mtwara-Dar es Salaam length of pipeline, a 551-km stretch, supplying over 300MW of power that was completed in September 2015. It has been so successful that there are plans to branch out across the country. With planned expansions, delivery capacity could increase to 1,000MW.

Which areas will be the first priorities for this planned distribution expansion?

Firstly, we have plans to connect between 30-40km in the north. Following that, we will look toward entering the cities of Mkuranga, Tanga, and Morogoro, important industrial hubs in the region. We also plan to ferry gas up-country by using CNG cars.

What strategies does TPDC have in place to fully exploit the commercial potential of downstream operations?

We have divided Tanzania into four areas. Firstly, there is the southern region of Mtwara and Lindi, in which we are about to complete a study on the best way to leverage commercial potential. The second area is Dar es Salaam. Here, we are currently connected to about 45 industries, but we want to boost this number to over 100, since between 50 and 70% of the government's revenues from industry come from Dar es Salaam. By YE2017, we will have divided Dar es Salaam itself into four sub-regions and will have put in place measures to link up interested parties with TPDC to fast-track development. The third is the coastal region, the fastest growing in the country in terms of industry. We are already making inroads, and by YE2017, we are aiming to give access to gas to 12 more industries.

How will TPDC marry the need to fast-track projects through PPPs while remaining protective of local content?

A new statute was introduced in 2015, which includes local content regulations and has been a great help for TPDC. Our first test will be the Dar es Salaam project, for which we are currently working on our PPP model. We have started in some areas, for example, that are connected to industries engaged in pre-financing for projects. One of the main challenges we face is the capital-intensive nature of gas projects. It is always a question of obtaining the right balance between seeking partners to reach our goals, while ensuring we keep Tanzania's best interests at heart.

What are the key targets and objectives for TPDC over the next 10 years?

The first thing we did was to embed a clause for capacity building and training into all of our contracts. This has been effective for the past 20 years or so, helping people benefit in the long run from the success of Tanzania's energy sector. Educational institutions are on board with this, offering scholarships, opening courses, and options for those wishing to widen their knowledge in the sector. We have a collaboration program with a Norwegian university that has proven a resounding success.