MEMORANDUM OF UNDERSTANDING (MOU) WITH THE CONTRACTOR OF THE 542-KILOMETRE GAS PIPELINE, CHINA PETROLEUM AND TECHNOLOGY DEVELOPMENT COMPANY (CPTDC)

AFTER completion of the construction of the 542-kilometre gas pipeline from Mtwara to Dar es Salaam, plans are underway to put up a 150-200 million US dollars (equivalent to 430bn/-) mega plant to facilitate the transportation of the natural gas to large-scale industries and households.

The Tanzania Petroleum Development Corporation (TPDC) Acting Managing Director, Engineer Kapuulya Musomba, said that the regions which will benefit from the new project include Mtwara, Lindi, Kilwa and Dar es Salaam.

Eng. Musomba was signing a Memorandum of Understanding (MOU) with the contractor of the 542-kilometre gas pipeline, China Petroleum and Technology Development Company (CPTDC), who handed over the gas pipeline following its completion.

"We have already conducted feasibility studies to put up the infrastructure to connect the areas and construction is due to start in the next financial year," he said, noting that African Development Bank (AfB) would finance the project.

Mr Musomba said that large and small industries and the majority of households are set to benefit from the gas supply initiative. He said some industries had already been lineup for gas connection, among them is Dangote Cement, EPZA in Bagamoyo and Bakhresa Company in Mkuranga District.

Mr Musomba confirmed that the construction of the 542-kilometre gas pipeline has been completed and handed over to Gas Supply Company Limited (GASCO). He said the completion of the pipeline opens steady opportunities of stimulating economic growth by connecting industries with reliable production energy.

The TPDC boss said the corporation conducted detailed inspection before the handing over and got assured that the infrastructure was fit for operation. "TPDC experts also carry out close and regular inspections of the pipeline to ensure it works well," he noted.

Mr Musomba said that the Chinese company (CPTDC) has been asked to stay around for a period of one-year to keep close inspections, offering maintenance and other necessary requirements in the running of the pipeline. The construction of the pipeline started in 2012 from Mtwara and Songosongo to Dar es Salaam.

It would help stimulate industrial economic growth. The US $1.22 billion dollar Mtwara-Dar es Salaam pipeline and gas processing plants at Madimba and Songo Songo Islands, largely financed by a Chinese loan, is part of a plan to add about 2,000 megawatts of new gas-fired electricity generating power by 2018 to increase Tanzania’s generating capacity to 10,000 MW by 2025.

Most new plants will be gas-fired but Tanzania also wants to use coal reserves and renewable resources such as wind and geothermal. Tanzania estimates it has about 55 trillion cubic feet (tcf) of recoverable natural gas reserves off its southern coastline.

Discoveries in Tanzanian and Mozambican waters have led to predictions the region could become the world’s third-largest exporter of natural gas. The government said it hopes by switching to gasfired power plants to save around $1 billion (about 2.1trl-) a year in oil imports for electricity generation through diesel-fired power plants.