Although natural gas accounts for more than 50 percent of current power generation in Tanzania. There is a poor understanding of how the total gas to power value chain looks like.
Although you buy electricity from the state-owned utility Authority (TANESCO). But TANESCO may not have much to do with it.
So here is how Tanzania’s gas-power value chain real work.
Tanzania’s gas-to-power supply chain divided into three segment
1.Upstream: Companies in the upstream segment are involved in getting gas resources out of the ground. In other words, they find gas resources, and bring them to the surface, so that they can be moved and placed where they can be processed into useful products. Very often, these companies are called exploration and production companies. These are international oil companies that extract Tanzania’s gas was granted tax and royalty terms for developing and extracting gas resources.
2.Midstream: This portion of the industry involves the construction of transport infrastructure and processing and transportation of natural gas to the market. Midstream infrastructure consists of gas processing plants, pipelines.
3.Downstream: It involves the provision of gas to end-use customers. In other words, downstream involves the marketing and distribution of natural gas to the end-users. Here is where international exploration and production companies sell the gas to the customers. After the gas has been processed and transported to Dar es Salaam. Gas producing companies supply the gas to the state-owned utility company, UNESCO as well as supplied to a range of industries including steel, glass, textiles, beverages, tobacco, cement, and paper. The gas is used by TANESCO and factories for power generation.
So hopefully, this helps you get a detailed understanding of how gas-to-power value chain work in Tanzania.