THE government through Tanzania Petroleum Development Corporation (TPDC) and ARA Petroleum Tanzania Limited of Oman on Friday signed a gas addendum for Ruvuma-Mtwara Production Sharing Agreement (PSA).
The signed pact will enable the development of the Ntorya gas field whereby TPDC in collaboration with ARA Petroleum are planning to undertake various extraction activities including drilling of production wells and construction of preprocessing units.
Also, there will be a construction of infrastructures for gas production and transportation whereby a 30 km gas pipeline will be constructed from Ntorya gas field to Madimba gas processing plant.
Speaking during the signing ceremony, Minister for Energy January Makamba said completion of the project will increase the production of natural gas in the Country.
He said, currently, gas production in the country is from Songosongo and Mnazi Bay gas fields that started production in 2004 and 2006 respectively.
“The two fields are currently producing at a capacity of 230 million standard cubic feet (mmscf) per day. Therefore, the development of the Ntorya gas field is expected to increase the daily gas production to 290 mmscf per day,” he said.
According to him, the successful implementation of this project has many advantages to Tanzania including collection of 12.5 per cent loyalty, profit share, 30 per cent corporate income tax, 30 per cent additional Profit Tax, withholding taxes, city service levy as well as short and long term, direct and indirect employment for Tanzanian.
The minister went on to invite industrial investors and institutions to use the opportunity to invest as natural gas is cheaper and reliable compared to other alternative energy, noting that TPDC expects to invest more than 500 million US Dollars for the development and production of the Ntorya gas field.
He has urged TDPC to cooperatively work with the ARA so as to complete the work quickly, aiming at the public to benefit from the project.
For his part, the TPDC Managing Director Dr James Mataragio assured their commitment to effectively supervise implementation of the project.
“We shall continue to work with ARA petroleum in the production of the natural gas from the onshore fields at 230 mmscfd whereas over 80 per cent of it is used in power generation for industrial use, households and CNG for the vehicles,” he said.