New gas discoveries in Tanzania pushed the reserve estimates

Jun 20, 2012 12:00 AM

by Nicholas Bariyo

Major new natural gas discoveries in Tanzania have pushed the reserve estimates up to 28.7 tcf from 10 tcf, Tanzania's deputy energy and minerals minister said. These latest finds in the country's deep-water gas blocks are attracting new interest from a host of international oil companies especially as the bulk of the country's offshore and onshore gas and oil blocks are yet to be explored, Stephen Masele said.
"We are encouraging companies to maintain the current momentum in the gas and oil exploration sector," he said.

The latest discovery of around 3 tcf of gas reserves in block 2 by Norwegian oil company Statoil and US-based ExxonMobil has cut the risk. Tanzania, which is slowly becoming a regional gas hub after a flurry of discoveries, has around a dozen deep sea blocks that are yet to be explored due to disputes over revenue sharing with the semi-autonomous archipelago of Zanzibar.
The US Geological Survey estimates that East Africa's coastal region holds up to 441 tcf of natural gas.

Tanzania is also trying to boost power generation at gas-fired thermal plants as it seeks to wean its electricity sector away from unreliable hydro power generation as well as the expensive diesel-fired thermal plants. In January, the state power utility raised electricity tariffs by at least 40 % citing higher generation costs due to the acquisition of emergency diesel-fired thermal plants.
The increase mainly affected gold miners and other large industrial power consumers. Currently, Tanzania uses around 200 mm cf of gas a day to run thermal plants, plans are underway to double gas production by the end of 2013, according to Mr Masele.

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