PANAFRICAN Energy Tanzania (PAET) has signed a long term gas sales agreement (GSA) with the Tanzania Petroleum Development Corporation (TPDC) to supply up to 20 million standard cubic feet (MMscf/d) of natural gas per day to the national natural gas infrastructure in Songo Songo Island.
The PAET said yesterday the gas will be processed and transported to Dar es Salaam primarily for power generation.
PAET Managing Director, Andrew Hanna said, “Through foresight, flexibility and cooperation PAET is today in prime position to meet immediate and near-term future energy needs of Tanzania.”
“The degree of effort that has gone in to establishing this GSA, by all parties, cannot be underestimated. It demonstrates what can be achieved here in Tanzania when we work together in a transparent and cooperative way.
We believe that this agreement once again places PAET in a position where we can support Tanzania in continuing to achieve its enormous potential,” he said.
Sales of gas under the milestone GSA will replace 20MMscf/d of the 35MMscf/d recently sold by PAET under the short-term sales agreement established with TPDC and TANESCO in December last year.
The balance MMscf/d sold by PAET under the short-term agreement will continue to be supplied through the national natural gas infrastructure alongside the 20MMscf/d sold under the GSA, until completion of the installation of refrigeration on the Songas processing plant by the middle of the year.
On completion of the refrigeration project, the 15MMscf/d will revert to be sold by PAET to TANESCO through the Songas processing facility and the short-term agreement will conclude.
The establishment of the GSA allows PAET to continue to meet recent increases in demand on a long term basis, ensuring TPDC is able to support TANESCO in sustaining progressively stable and more widely available power generation.
With spare productive capacity from the Songo Songo field already established, PAET has volumes of gas immediately available to meet imminent increase in demand as TANESCO continues to expand its power generation capacity, TPDC continues to develop its downstream gas sales and supply business and as industrial use of gas accelerates.
Under the short term agreement PAET achieved average additional gas sales of 61 MMscf/d through the first quarter of 2019, compared to an average of 40MMscf/d for 2018.
Under the GSA gas will be supplied initially through PAET’s SS-12 well, drilled in 2016 as part of a wider development of the Songo Songo field. The SS-12 is tied into the national natural gas plant alongside the S-11 well.
The field development and tie-ins have ensured PAET has volumes of gas available today to instantly meet future demand.
The company is in the final stages of installing refrigeration on the Songas processing facility on Songo Songo Island.
This is part of an overall package that will eventually include compression and will further increase and sustain gas availability in line with demand.