Gas pipeline to be complete next month

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TRANSPORTATION of natural gas from
Madimba in Mtwara to Kinyerezi I Power Plant in Dar es Salaam will start
early next month after completion of the construction of the
542-kilometre natural gas pipeline project.
According to the Minister for Energy and
Minerals, Mr George Simbachawene, the transportation of natural gas
will save over 1 1.6tri/- per year currently spent on importation of
fuel for electricity generation.
The pipeline will have an installed
capacity of transporting 784 million standard cubic feet daily, a volume
which can generate over 2,000 megawatts (MW) of electricity, including
the 300MW plant at Mnazi Bay.
Mr Simbachawene noted that upon
completion of the infrastructures, the project would see the country
getting reliable electricity supply, expansion and increase of
industrial production, cleaner environment and employment creation.
The Minister made his remarks yesterday
in Dar es Salaam after he visited Kinyerezi 1 Power Plant to inspect the
progress of the implementation of the project carried out by
contractors, TANESCO as well as Tanzania Petroleum Development
Corporation (TPDC).
He urged Tanzanians to be patient as
TANESCO will cut off electricity where repairs will be done so as to
ensure the availability of gas electricity in most parts of the country.
He stressed that the availability of
natural gas will help reduce the use of water where in some of the
hydroelectric dams that have slowed down production due to climate
change and environmental degradation.
Kinyerezi I Power Plant, Eng John Mageni noted that two out of four machines are complete and will produce 220Kv of electricity.
“The machines are currently on a test
run and within two weeks will be complete,” said Eng Mageni adding that
by early September this year, natural gas from Mtwara will be available
at the plant ready to be distributed to various sub stations including
the national grid.
In a related development, TANESCO
Managing Director, Eng Felchesmi Mramba said when Kinyerezi 1 Power
Plant kicks off, the company would significantly reduce the cost of
power supply.

He added that 150MW are expected to be
produced after the completion of the construction of Kinyerezi 1
Electricity Power Plant, a step towards the execution of the
government’s aim of adding electricity capacity on the national grid.

Several Australian Companies To Invest In Tanzania Gas Industry

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SEVERAL Australian companies have shown
interest to invest in the country’s natural gas industry, says the
Tanzania Investment Centre (TIC).
The Mtwara Gas Pipeline is expected to
be inaugurated later this month and the facility will enable the country
to produce 2800MW of power by 2016.
East Africa is now a new oil and gas
frontier after a string of hydrocarbon discoveries, which producers hope
to exploit to supply energy-hungry Asian markets. Tanzania estimates it
has more than 55 trillion cubic feet (tcf) of natural gas.
TIC said “Australian companies are
confident that they are well positioned to add value in Tanzania gas
industry, given its significant experience, knowledge and capability.”
The statement pointed out that an LNG
industry has the capacity to transform the economy and in Australia it
was able to create over 103,000 jobs during the last decade.
“Once operational these projects will
create an estimated 1,159 jobs. TIC registers gas projects subject to
approval of the Ministry of Minerals and Energy,” the statement said.
The statement said the move by
Australian investors to show interest follows invitation by President
Jakaya Kikwete during his recent visit to Australia.
The statement quoted TIC Public
Relations Manager, Mr Daudi Riganda, as saying TPDC and Australia
based-company, Squire Patton Boggs hosted dinner for Mr Kikwete.
“President Kikwete used the platform to
engage leaders in Australian energy and resources sector on the
investment landscape in Tanzania,” the statement observed.
TPDC has been designated as the national
oil company with aspirations to continue to be involved in exploration
and development activity within Tanzania and expand its reach
internationally.
Mr Clare Pope, Partner in Energy and
Natural Resources at Squire Patton Boggs, said Tanzania had taken many
important steps to ensure the development of its oil and gas industry
and participation by significant international oil and gas companies.
Mr Campbell Davidson, Managing Partner
of Squire Patton Boggs in Sydney, said: “As we see continued growth in
foreign direct investment in East Africa, we are working with a number
of key energy clients in Asia-Pacific to ensure they can benefit from
the strides being made in the energy sector.”

Between March 2007 and March 2017 TIC
registered 35 projects from Australia, worth US $1,163 million. Once
operational these projects will create an estimated 1,159 jobs

Australia resource giants invited to Tanzania

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Mr Kikwete on Tuesday met with Prime
Minister Tony Abbott in Canberra as part of a four-day visit, just
months before he ends his second and final term as leader of the east
African nation.
“We invite companies to develop the LNG,
make use of the natural gas to produce other products,” the president
said at the opening of the talks.
“I’m here to discuss how to further our relationship on a political level.”
About 18 Australian mining firms have
more than 100 operations in Tanzania, which has the second largest gas
reserves in east Africa, after Mozambique.
Mr Abbott said he hoped to build on the existing business ties.
“While we are separated by a great ocean, we are reaching out our hands across the ocean,” he said.
The two leaders are also understood to
have discussed security issues, including the threat from al-Shabab,
which is part of the Islamic State network.
Tanzania is keen to harness the use of Australian vocational trainers and universities.

On Wednesday, Mr Kikwete will receive an
honorary Doctor of Laws from the University of Newcastle, which has
offered scholarships to Tanzanian students for many years.

See Why Crude Oil Price Will Stay Low All through 2015 and About Mid -2016

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 Now, a lot of people don’t understand what’s going on  and they dont know what causes the low crude  prices ? and
they think that OPEC is trying to punish the US Shell players and that’s not it
at all. OPEC did nothing, nothing, they just didn’t cut production and they’re
doing it for two very important reasons.
Number one, they’re
sticking a knife in Russia’s back while Russia’s down because they got really
upset over the whole Ukraine thing. Number two is they’re punishing the other
OPEC members that went rogue that didn’t cut production eight months ago when
they asked them to like Brazil and Venezuela.

So, keeping oil below
$85 a barrel is destroying Russia’s economy and it’s destroying Venezuela and
Brazil as well, so that’s what’s going on. We are predicting that those crude
prices will stay low all through 2015 and about mid-2016, it will get back up
to $85 a barrel

Will Tanzania Benefit From Natural gas discoveried

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ELuck has struck the region of Tanzania.
For couple of years now new announcements of natural gas discoveries are  being made.
Mtwara, Tanga, Pwani Ruvuma have found natural gas deposits.Exploration is still ongoing
So even more discovery could be forthcoming.
Luck has definitely struck Tanzania.But the question is how will the people of this country will benefit from this?

Discovery of Natural gas in Tanzania can change Nationa Economy

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If you are looking for house in Dar es Salaam hurry up. With the recent discovery of massive natural gas reserves affordable houses will soon become rarity.
Those proved and potential reserves can be game changer for Tanzania

See Where does Petroleum Come from

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We are going to talk Origin of petroleum
But First  I will talk
about the origin of the world itself, Rock outcrop at the surface of the earth
have been producing oil for century and this oil was known as rock oil, Because
at that period oil was seeping out the rock, But at the middle of 19 century
some body called the word Petroleum, Petro is greak word meaning rock and leum
is latin word meaning oil and they combine these two word called petroleum.
Then become popular word and eventually the word adopted by industry itself and
now is known as petroleum industry
 Where does petroleum come from?
 There are two theory about where petroleum come from
·        
Organic
theory :State that oil was developed over millions of years from organic
materials from remains of animals and plants that were once alive, the proteins
life floaded in the sea like plankton and algae then die and fed to the bottom
of the ocean.
·        
Inorganic theory In this teory the source of oil
is from chemical reactions between minerals, In the laboratory scientists have
been able to make methane gas by applying heat under high pressure to minerals
even though a very small percentage of oil today may have developed from in
organic chemical reactions between minerals the source of most our oil appear
to be the result of organic decomposition.
These decomposition is the decay of the
remains of animals and plants that died millions of years ago
                When
am talking about animals that was died and generate oil am talking about tiny
microscopic animals that live in the sea eg plankton and algae
    These animals die
under special circumstances, and what do I mean by that?
         As you know
when most animals die other animals and bacteria arrive to consumes the remains
living nothing. In the shallow water where these animal live, sweep current
come on and push these down to where there is no enough oxygen to live and so
they die. These animals went from an aerobic environment where there is plenty
of oxygen to an anaerobic environment where there is little oxygen where all
die at the same time.
In an anaerobic there also not enough oxgen for most animals
microbs or bacteria to come along and eat the remains of planktons and algae so
the just lie there until the get buried by particles of silt and sand.
Over period of millions of years these layers of remains in
sand and silt particles are buried and curved by more layer until first layer
become very deep. All the way of these layer to press down and squeezed caused
increased in pressure and temperature until the sedimentary layers are formed
into shale, sediment change into rock, and little dead microbs get cooked into
hydrocarbon.
These is the theory of how petroleum and coal is made.
Oil is made from animal like plankton
Coal is made from vegetation like plants

Gas is made from deeper formation where microbes are cooked
longer

Tanzania Petroleum Development Corporation (TPDC) Awards CGG Airborne Gravity Gradiometer Surveys

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CGG announced  that it has been awarded a contract by the
Tanzanian Petroleum Development Corporation (TPDC) to acquire
high-resolution gravity gradiometry and aeromagnetic data over two
onshore areas along the South-Eastern Tanzanian Coastal Basin and the
eastern arm of the East African Rift.
Acquisition over a total area of 30,000 sq km will commence in mid
August 2015 and is scheduled to last up to two months. Using the
industry’s lowest noise Gravity Gradiometry, FALCON®, CGG
will deliver high-resolution data and interpretation to help evaluate
the hydrocarbon potential of these basins ahead of future licensing
rounds.
Tanzania has already established itself as a highly prospective
hydrocarbon province in East Africa with a series of significant
discoveries offshore and CGG is excited to be part of this next phase of
TPDC’s exploration of the onshore basins. This survey will benefit from
the experience gained through the completion of many projects
throughout Africa using the most advanced technologies available in the
industry.
Greg Paleolog, Senior Vice President, CGG Multi-Physics, said: “CGG
is delighted to work with TPDC to improve understanding of the structure
of these basins and to assist in the identification of suitable areas
for future seismic acquisition. With the selection of our FALCON
service, we can ensure that TPDC and potential operators will have the
best quality data and interpretation products ahead of the proposed
licensing round.”
“We know that there have been significant discoveries in the Kenyan
and Ugandan parts of the Rift Valley, and there may well be undiscovered
oil or gas reserves on Tanzania’s side,” Dr. Mataragio, the Managing
Director of TPDC explains. “The two-month-long basic Airborne Gravity
Gradiometer survey is imperative given the significant reserves
discovered in similar geological settings in Kenya and Uganda. The
promotion of our blocks is part of TPDC’s core business and this
exploration effort will add value and attract investors.”
Early this month the Parliament of the United Republic of Tanzania
passed a new Petroleum Bill, which will be signed soon. Under the new
Petroleum Bill, TPDC is now lawfully recognized as a National Oil
Company (NOC). The NOC will participate fully in exploration and
production of oil and gas and this campaign in particular signifies the
commercial commencement of NOC in E&P activities in Tanzania.

CAG TO AUDIT OIL AND GAS COMPANIES

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Dar es Salaam: The Controller and Auditor (CAG) will carry a special audit on oil and gas industry.
CAG Mussa Assad said citizens from areas with gas and oil should benefit from companies operating in their locales.
“This sector [oil and gas] is very crucial,” he said, adding “we will make sure they are controlled accordingly to give to the society what it really deserves.”
Assad said his office might fail to compete auditing in some offices following budget deficit.
Despite receive less from treasury; the CAG remains adamant that his office will execute its duties.
“With the little we have we will make sure we implement fruitful projects which will benefit citizen but we will not be able to finish all of projects.”
For this fiscal year the CAG office were scheduled to receive TZS 86 billion but only received TZS 76 an amount which will not be enough for all projects set for this year.

Components of Production Sharing Contract in Kenya

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Licensing of petroleum exploration blocks, is governed by the
Petroleum (Exploration and Production) Act Chapter 308 of the Laws of
Kenya. All contracts are based on a Model Production Sharing Contract
(PSC) issued as a schedule to the Regulations issued under Section 6 of
the Act.
The signed Production Sharing Contracts have the following key component:
a) Signature Bonus: This is a one-off fee payable to
the Government by the Company upon signing of an oil exploration
contract. It depends on the area of the Block and previous data acquired
on the Block. Signature Bonus negotiation came into effect in 2009. In
block 12B for example the signature bonus paid was $300,000 according to
JV partner Australian Swala Energy. In block L27 operated by CAMAC
Energy the signature bonus paid was $310,000 according to the PSC available on this website.
A surface fee is also payable and is calculated on
the basis of the surface area of the Contract Area on the date those
payments are due. In Block L27 the amount set is $5 per square kilometre
per annum during the Initial Exploration Period, $10 per square
kilometre per annum during the first Exploration Period, $15 per square
kilometre per annum during the second Exploration Period and $100.00 per
square kilometre per annum during the Development and Production
Periods
b) Work programme and expenditure: The contractor
guarantees the agreed work programme and minimum expenditure. Initially
this was pegged at 15% bank guarantee and 85% parent company guarantee.
However, the Ministry has improved this and now the newly licensed
companies are required to provide a 50% bank guarantee and 50% parent
company guarantee.
This is to make sure that the companies proceed with their work
progamme expeditiously as agreed with the Government and that incase of
non-performance, the Government can liquidate the guarantees more
easily. For small companies (based on their annual turnover criteria),
they are required to post 100% bank guarantee. It is important to note
that upstream petroleum operations are capital intensive and the
Government entirely relies on the oil companies to invest their risk
capital in the operations.
In addition, this risk capital is raised through equity. This is
contrary to investment in mid stream and downstream petroleum segments
which can be funded by debt
c) Cost oil: This is usually the negotiated
percentage of total crude produced for recouping of investment costs
incurred by the contractor in exploration and production of oil in a
given field. It is normally up to 60% of all the oil produced in a field
for about five years.
d) Profit oil: This is the remaining oil after
deducting cost oil and is shared between the Government and the
contractor. For example, when a field is small the Government take is
50%. As the production increases, the Government take can increase up to
78% of the total profit oil.
e) Windfall profit: Where oil prices are higher than
the negotiated threshold, the Government creams off contractors take
above the threshold crude oil prices by 26%.
f) Exploration phases – there are three exploration
phases of two years each, the initial period, first additional period
and second additional period. For ultra deep offshore blocks, the
initial period is extended to three years due to extra logistical
challenges in the deep water acreage.
g) Relinquishment – is 25% of the area of the block for each period
The PSC also has the license rental fee and training fee included. In
Block 12B for example the license rental fee is set at $40,000 during
the first year (2012-2013) and $80,000 during the second year, training
fee is $100,000 per annum. During the first production phase the
training fee is set at a minimum of $200,000 in Block 1 PSC with Lion
Petroleum.
Check out PSC’s for the various East African countries namely Kenya, Uganda, Tanzania, Mozambique available on our website.
Additional Source: Ministry of Energy & Petroleum Website