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Tanzania plans US30mn gas plant investment in Lindi

Muhongo said that the development will assist in growing the economy at a faster pace. (Image Source: jpenrose/Pixabay)

 

The Tanzanian minister for energy and minerals, Sospeter Muhongo, has announced that the government will invest at least US$30bn for the construction of a gas processing plant in Lindi region

Speaking at the official launch of the Nanenane exhibitions in Lindi, Muhongo said the government is already embarking on the grand plan and that Lindi residents and Tanzanians in general should expect economic revolution in a few years to come.

“I would like to ensure Lindi residents and Tanzanians in general that our economy is going to grow at a high speed, we are going to invest at least US$30bn in the construction of gas processing plant,” he said.

Muhongo pointed out that for the gas plant, the government will be required to construct about 200 km of gas pipes from the sea to the plant. Given the large scale of the project, the project requires huge amount of investment, high skilled and experienced personnel as well as good supervision and is likely that it will take many years to complete.

According to the minister, upon completion of the project, the government will be able to process gas and thus boost the country’s economy.

The project is expected to increase earnings for the government through consumption of natural gas while at the same time provide opportunities to improve such sectors as health, aviation, sea ports among others.

Muhongo also added that since the discovery of natural gas in Tanzania, the economy has witnessed tremendous growth, with 70 per cent of power generation coming from gas, which is currently serving more than 30 industries in Dar es Salaam.

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Do you struggle to sell products or services into Oil and Gas Industry? Like to sell more into oil and gas industry with less effort?

Article meets all of these questions?

Nowadays in Tanzania there are many small organizations and companies that sell products and services to the oil and gas companies.

Some of these organizations supply safety  equipment like Safety boot, helmet. Also, they provide training services, transport services,

Human resources services both permanent and temporary staff, consultation services etc

However, few of these organizations have successfully selling, because either they sell into the wrong segment of oil and gas industry or they use wrong sales strategies

Read:7-ways-to-make-money-in-Tanzania-oil-and-natural-gas-industry

Article explores tips to improve your sales and generates more income selling into oil and gas industry
Let face them

Fix the problems
If you wish to sell more into oil and gas industries, you should solve a specific problem that your clients have.

Determine who has that problem and determine which segment of oil and gas industry is more likely to buy your product or services.

The industry has three segments decide to fix something either upstream, downstream or midstream segment. Read here 3 segment of oil and gas industry and how industry works

Due to crude to this oil below $ 50 per barrel if you fix problem into upstream sector you are wasting your time and I recommend you to skip into midstream and downstream sector.

Oil exploration and production companies will not listen to you and buy anything from because they are hurting with money

Focus on few vital products and services than many trivial
The common mistake that an organization does is this. They think will sell all products they have into petroleum industry.

In all of your product or services, you offer there few vital products that your clients are more interested in. also, have a great positive impact into your sales.

Concentrate on those few vital products than many trivial. This will not only increase your productivity but will save your time.

Reputation of your organization
This is the most important thing to have success selling into oil and gas industry. It refers how other clients and customers outside there think and talk about your services.

If other clients provide positive comments on your services and products you have a greater chance to attract new prospects.

Focus on quality and forget on prices
Clients would be willing to pay what  want if they believe your products and services will fulfill their wants. Remember you are paid for results and not activities,

so if your products or services have a specific benefit that customers need, they will purchase at prices you want.

Your customer has experience of buying cheap products. So prices do not matter if you sell a quality product
Final words
To sell more into oil and gas industry, you must have a better understanding of how the prospect will enjoy the benefit of using the product or services. Clients would not buy your products if he does understand how they can benefit from services or product you sell.

imagesThe World Bank has asked governments of Uganda, Kenya and Tanzania to develop insurance measures to guard against fluctuating oil prices as they prepare to begin production.

Prices of oil and gas usually affect the cost of goods and services at both national and international markets.
Uganda has both oil and gas deposits, Kenya has oil, while Tanzania has large deposits of gas and the three East African countries are preparing to begin producing for local and international markets.

Addressing participants at a regional conference on oil and gas in Entebbe recently, the World Bank Senior Economist Uganda country office, Dr Jean -Pascal Nganou, said oil and gas prices will always fluctuate and countries should be prepared to handle the consequences.

The conference was organised by Friedrich-Ebert-Stiftung.
He said in case of price dip by diversifying their by economies instead of aligning every development agenda to oil and gas revenue.

Also Read:7-ways-to-make-money-in-Tanzania-oil-and-natural-gas-industry

“Oil and gas prices will always fluctuate, consequently, oil and gas producers should develop by themselves and for themselves a good insurance mechanism against sudden drops in world prices,” Dr Nganou said.

He added: “Saving part of future oil revenue is the most adequate response to that type of problem. Several governments have opted for a variety of oil revenue saving mechanisms.
“Uganda, Tanzania and Kenya should review these mechanisms, analyse the results achieved, and make their own choices based on realistic assessment of their own situation, needs and risks.”

The World Bank produces periodic reports on world commodity price focus. In the latest report, the bank raises hope that there is going to be a pick-up in oil prices in the international market.

In this regard, Dr Nganou said: “Our commodity price specialists believe that the price of oil will rise again and most of the projections in Uganda are based on international crude oil price of $90 (Shs319,500) per barrel. We may be right, we may be wrong and this is one of the lessons for a good management of future oil revenue.”

Other challenges
Other than oil prices, East African countries are also faced with the problem of poor infrastructure, which affects the development of the private sector. The infrastructure includes power, roads, railways which East Africa must deal with to realise tangible development.

“Countries like Uganda, Kenya and Tanzania need to repair, and expand their economic infrastructure which at present is a major obstacle to private sector development,” the World Bank senior economist Uganda country office, Dr Jean -Pascal Nganou, said.

He said improved transport, power and water supply services are essential to stimulate urban and rural growth and improve the condition of the population.

The resident director Friedrich-Ebert-Stiftung, Ms Mareike Le Pelley, said oil and gas exploration is not an end in itself for the development process.

“The East African region has had high GDP growth rate but other social indicators like income distribution, unemployment and concept of inclusive development have not yet taken root in the region,” she said.

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Wentworth – the Oslo Stock Exchange and AIM listed independent, East Africa-focused oil and gas company – is pleased to provide an operational update following first delivery of gas to the pipeline project from its assets near Mnazi Bay, Tanzania.
Deliveries of gas

Further to the company’s announcement on 20 August 2015 that gas deliveries to the new transnational pipeline had commenced, the gas production facilities at Madimba, the Mtwara to Dar es Salaam pipeline and the Kinyerezi Gas Receiving

Facility have now been fully commissioned and are operational. Mnazi Bay Gas is currently being used to generate power in Dar es Salaam at the existing Ubungo-II and Symbian power plants, as well as at the new Kinyerezi-I power plant.

Production volumes into the pipeline are currently at 33 million ft3/d from three wells on a restricted flow basis, and are expected to reach 80 million ft3/d once all of the generators at these three power plants are fully operational, which is expected in 4Q15.

You can also like to read: 2 Reasons why east African oil and gas industry could change global energy market

Three of the five existing gas wells at Mnazi Bay have been successfully brought on-stream with well performance in line with expectations. The fourth well is expected to be tied in during the month of November 2015 and the fifth well is expected to be tied in and ready to produce into the new pipeline in 1Q16.
Sales and payments

Sales gas volumes of 1032 million ft3 were delivered to the new pipeline during October 2015 (an average of 33 million ft3/d) and a gross payment of US$3.8 million to the Mnazi Bay Joint Venture Partners has been received from the buyer of the gas, Tanzania Petroleum Development Corporation (TPDC).

Under the Gas Sales Agreement signed on 12 September 2014, the sale price has been set at US$3 per million BTU, approximately US$3.07 per thousand ft3, rising in line with the US CPI industrial index commencing in 2016.
Geoff Bury, Managing Director, commented:

“We are pleased with the progress that has been made by the Government during the start-up and commissioning phases and we are delighted about how well the new pipeline system is working. We, along with our Joint Venture Partners, feel confident that our existing wells will be capable of delivering the initial target production volumes of 80 million ft3/d while we expect the Government owned power plants to be ready to take the full amount of these volumes during the last quarter of 2015. The Mnazi Bay Concession gas plays a vital role in reducing the cost and improving the reliability of power generation in Tanzania.

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Recent oil and gas discoveries across East Africa, most notably in Mozambique and Tanzania, have seen the region emerge as a new player in the global oil and gas industry. As exciting as the huge gas fields of East Africa are, however, the strong decline in oil prices and expectations for an L-shaped recovery with low prices over the coming years are increasingly challenging the economic viability of the industry in this region.

The discoveries were expected to drive billions of dollars in annual investment to the region over the next decade. According to BMI estimates, the finds in the last few years are more than that of any other region in the world, and the discoveries are expected to continue for the next few years.  However, falling global oil prices are threatening the commercial viability of many of these gas prospects.

The Indian Ocean, off the coast of Mozambique and Tanzania, is proving to be a rich hunting ground for natural gas exploration. According to US Geological Survey estimates, the combined gas reserves of Mozambique and Tanzania could be as high as 250 trillion cubic feet. In Mozambique alone, proven gas reserves have increased dramatically from a mere 4.6 trillion cubic feet in 2013 to 98.8 trillion cubic feet as of mid-2015. Given continued offshore discoveries and the size of discoveries to date, continued growth in proven gas reserves is likely to continue into the foreseeable future.

New exploration on more frontier blocks, however, will likely be slowed as oil and gas prices fall and companies apply increasing caution to investing in frontier markets with nascent industries, poor infrastructure and long lead times.

As liquefied natural gas (“LNG”) contracts remain heavily indexed to oil, the fall in global oil prices poses significant downside risk to gas production projects. Persistent oversupply in the oil market continues to put downward pressure on oil prices. This trend of lower prices is unlikely to reverse in the near future with futures prices estimating the average Brent crude oil price to range between USD50-65/bbl over the next five years. Industry research estimates that an oil price of USD70-80/bbl would be needed for the LNG gas projects just to break even.

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Sustained lower oil prices are likely to take a heavy toll on the development of upstream gas production and downstream refining projects in the region, as pricing uncertainties affect the commercial viability of LNG projects, delaying investment in the region. This will likely see companies hold off on Final Investment Decisions (“FID”) as they attempt to overhaul projects to cut costs and wait for more certainty on the direction of prices.

In Mozambique, for example, both Eni and Andarko have yet to reach a FID on their respective LNG projects. The lower price environment will likely force these companies to secure more off-take agreements before reaching FID. Furthermore, it is unclear whether these projects would be economically viable at current pricing levels, and given expectations for a slow recovery in oil prices over the coming years, we could see further uncertainty and delays in reaching FID.

The free fall of global oil prices is forcing companies to re-evaluate their growth strategy in the region. Anadarko CEO, Al Walker told investors that it is “unlikely that we will have the kind of margins that we have seen historically that would encourage us to go back into a growth mode.”

In Tanzania, the situation is just as precarious. Gas output will depend on construction of an LNG export terminal; however the project partners – BG Group, Ophir Energy, Statoil and ExxonMobil – have yet to reach FID, due to pricing uncertainties and a range of legal and regulatory hurdles.

Downstream refining projects are also in jeopardy. According to a Sasol report, Sasol, Eni and ENH have announced a partnership to look into a feasibility study for a large-scale gas-to-liquids (GTL) facility in Mozambique. However, key to the progression of a GTL project in Mozambique will be the cost of the gas feedstock and the long-term outlook for oil prices. Central to GTL economics is the price spread between natural gas and oil.

On a positive note, both Mozambique and Tanzania are expected to experience positive gas consumption growth as their respective governments look to increase the use of natural gas in domestic power generation. However, as in the case of Nigeria, there is a risk that each government may fix domestic gas prices, which could hinder investment in the region. Interestingly, Nigeria recently raised local gas prices to stimulate investment and plug persistent local shortages.

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Swala Oil & Gas (Tanzania) plc has selected a drilling location for the 2016 exploration well that shall be drilled on the Kito prospect in the Kilosa-Kilombero licence.

The technical review of the Kilombero Basin has shown the Kito prospect to be robust and has given promising indications of the potential prospectivity within the basin,” Dr David Ridge, the firm’s CEO said last week.

According to a company release, re-interpretation of the 2013 and 2014 seismic data have resulted in improved understanding of the Kito prospect.

Analysis of the available seismic has identified a number of additional structures along the Kito basin bounding fault.

Ridge said that the reinterpretation of data over Kito has resulted in a slight increase in the size of the mapped structure whilst early review of the additional structures has given the Company a better appreciation of the potential upside within the Kilombero basin.

Un-risked recoverable resources, mmbbls, net to the Company on the basis of a 25% equity interest post farm-in and the leads and prospects of the Kilombero basin he said, adding that recovery factor used 27%.

       Read: Swala energy complete farm out of Tanzanias kilosa -kilombero and Pangani licences interest to Tpl

 
 
“He added that the Company is in the process of completing an EIA over the selected drilling area and of selecting drilling contractors for the Kito exploration well in 2016.

Swala is an affiliated company to Swala Energy Limited, a company in turn listed on the Australian Stock Exchange (ASX) with ticker “SWE”.

It holds assets in the world-class East African Rift System with a total net land package in excess of 17,500km2.

New discoveries have been announced by industry participants in a number of licences along this trend, including Ngamia and Twigga, which extend the multi-billion barrel Albert Graben play so successfully developed by Tullow Oil into the eastern arm of the rift.

Swala has an active operational and business development programme to continue to grow its presence in the hydrocarbon provinces of East Africa.

 

 

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This weekend i have fun time to visit various internet forum relating  to petroleum industry ,  The most interesting thing  I found from one of  forum was some people were claiming with text like that” I have forward my Cv  to many  jobs sites but i didn’t see any response”.  These people might be the use wrong strategies or they use wrong jobs sites to apply for petroleum jobs.  One important thing to keep in mind is that Before you begin to send Cv to these jobs site you should know that  not all jobs sites are  good place for you to submit your resumes. One most common mistake many job seeker do is  to send their resume in any jobs site they see in the internet. I recommend you not doing so.

Okay, let’s go

Now days, when you go through  internet you may encounter a lot of sites where they  publish oil and gas jobs, But most of these jobs site are not keep in touch with employee, recruiters or recruiting agency who are  key people to give you opportunity in petroleum company.

companies.  Below i mention very important jobs site offer  petroleum jobs . These job sites are important,because they are used  for both employee and recruiting agency, These site release jobs announcement from different Location, including petroleum jobs in Tanzania. Also these sites have options where you can forward your  Cv and feed your information as much as you want. These sites include the following

 

My Final Words

Although these are important jobs sites for oil and gas jobs, i cant guarantee you that hundred percent if you use these jobs you will get jobs in petroleum companies, but you have a greater chances to increase your probability

 

 

 

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As you pursue a career in petroleum industry either you want to do  business in oil and gas sector or  you would like to get the job in petroleum companies, it is better to know these three types of petroleum companies and it well help you know  where you can start  so as to reach your dreams in petroleum industry.

Well ,let us begin

There are three types of oil Companies

1.International Oil company (IOC)  Which also is non state-owned or privately owned. An Ioc is an international super major  oil company like

  • Exxon Mobil,
  • Royal Dutch Shell, BP,
  • Chevron,
  • Conoco Philips

IOC are available  in most countries where oil and natural gas exploration and production occur.

2.National Oil Company (NOC) or state-owned company of an oil-producing host country, example

  • Tpdc in Tanzania
  • Adnoc in Abu Dhahabi
  • PEMEX in Mexico,
  • Statoil in Norway. Together all NOC currently control 88% Of oil reserves.

Unlike the independent or IOC they rarely work outside the  country borders.

3.Independent Oil and gas company

This privately owned company are non integrated which means they receive all revenue from  oil and natural  gas production at the wellhead. The are  exclusively in the exploration and production segment of the industry and are found world-wide.

My Final Words

Your role as graduate, students or entrepreneurs is to understand all above mentioned petroleum companies and analyze and evaluate  each types of company  and then  decide where is an i deal place to begin your career.

 

 

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UKTI Tanzania’s revised report provides an overview of Tanzania’s oil and gas sector including supply chain opportunities from the proposed LNG project.

UK Trade and Investment (UKTI) Tanzania has updated their 2014 report which examines the opportunities in the Tanzanian market. The report called ‘High Value Opportunity – Tanzania Oil and Gas’ offers a greater understanding and in-depth knowledge of:

– current and upcoming oil and gas projects
– supply chain opportunities and schedules for the proposed Liquified Natural Gas (LNG) project

Tanzania is a growing oil and gas market with on-going discoveries, including 19 exploration blocks. USD 10 to 20 billion investment is projected for exploration and production in the coming decade.

Exploration activities in Tanzania’s deep offshore waters have led to the discovery of 50.5 trillion cubic feet (tcf) of natural gas over the past 2 years. More discoveries are likely to come as drilling campaigns continue to unfold. It is estimated that the recoverable reserves will double to 100 tcf by the year 2015.

Tanzania forms part of UKTI’s East Africa High Value Opportunity (HVO.)

Contents of report

– background
– oil and gas overview of Tanzania
– opportunities in Tanzania’s LNG project
– doing business in Tanzania

Contacts
Contact Misbah Mughal at UKTI Tanzania to obtain a copy of the report.
Find out more about export help for the UK oil and gas sector.

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WILL recent natural gas discoveries help Tanzania become an economic powerhouse? The answer to this question isn’t quite simple. The gas and oil wealth will require a commitment from all the country’s stakeholders.

For a decade the government, along with international companies involved in hydrocarbons prospecting, has made a series of announcements of natural gas discoveries. These announcements have given rise to much excitement; ordinary Tanzanians are hoping for improvements in their living conditions, while the government is looking forward to billions of dollars in export revenues and foreign direct investment (FDI).

Government departments involved in the gas sector have made repeated statements of their intention to use these funds for national development. Along with this commitment the government has taken steps to improve the regulatory environment for hydrocarbons, including gas, through a review of its laws. It also commissioned a Natural Gas Master Plan for Tanzania that will outline scenarios for utilisation of the resource once production starts. Early indications are that the government is considering two options for the gas.

The first is to sell all of it in liquefied form on the international market, and the second is to use a portion of the resource for domestic gas-based industries, and export the rest. A key policy question is how to optimise the balance between the two, to meet the twin objectives of economic growth and sustainable development. The argument for general development of the gas sector hinges on the belief that it will bring in foreign revenues, create jobs and boost economic growth.

The government considers that these benefits will in turn contribute to poverty alleviation, one of Tanzania’s key priorities. Although the logic of this is understandable, given the country’s low socio-economic status, experience in many resource-rich African countries points to the fact that natural resource wealth does not per se translate into economic and human improvement.

You  can also read:Tanzania extracting of  gas in the Indian ocean likely to take longer

 

Countries such as Nigeria, Sierra Leone and the Democratic Republic of Congo, which have abundant natural resources, have been less than successful in using their endowments to make the transition from low-tomiddle- income economies, or to reach acceptable developmental indices. Pitfalls attending resource extraction have been widely documented.

The phenomenon of resource abundance existing alongside poor economic indicators, also known as the ‘resource curse’, threatens to overshadow the hopes and possibilities that come with large resource discoveries. A range of challenges associated with resource discoveries and booms has been widely ventilated.

There is a convergence of opinion that sound economic policy and law-making, a political will and governmental commitment to development, and good and transparent governance of the gas and oil sector, can do much to ensure that the exploitation of petroleum resources leads to broader economic and social development in the face of challenges that in the case of Tanzania among others include poverty, poor access to energy, limited infrastructure, unemployment and an unskilled workforce.

In the past two decades gas has emerged as a major component in the global energy mix. It is increasingly seen as an attractive fossil fuel alternative to crude oil and coal, because it is cleaner burning than either and sufficiently versatile to be used as direct domestic and industrial heating and power generation; as a direct fuel source for vehicles; and as industrial feedstock for liquid fuels and other chemical products. According to the International Energy Agency (IEA), natural gas is ‘poised to enter a golden age’.

 
 

A significant proportion of the coming gas boom will be from unconventional resources such as shale gas and coal-bed methane, provided that the social and environmental impacts associated with their extraction can be ameliorated. By 2035 gas will overtake coal as a primary energy source, to comprise 28 per cent of the global energy mix – second only to crude oil.

 

Similarly, it has been argued that ‘gas is the only fossil fuel set to increase its share of energy demand in the years to come’. Whereas the gas boom relies primarily on unconventional gas, conventional gas resources such as those in southern Tanzania certainly have a role to play. Currently, successive discoveries of conventional and unconventional gas resources suggest a revolution in the global energy industry may be at hand.

What this will mean for governments and national economic development depends on the governance mechanisms and management systems put in place to ensure that the resource is transformed into tangible social benefit. Whether the government will be able to keep to its objective of using gas for development, either through revenues from exports or the creation of domestic gas based industries or a combination of both, largely depends on the way in which the sector is governed.

It is too early to state with any certainty that the exploitation of this finite resource will benefit the majority of Tanzanians. Given the adoption and implementation of sound governance policies, however, together with competent and transparent administrative processes, effective, functional and independent oversight institutions and a commitment to directing profits towards socio-economic development, Tanzania can go some way to avoid the resource curse and its consequences while advancing its stated developmental goals.

Tanzania gained independence from Britain in 1961. Since then the country has been governed by Chama Cha Mapinduzi. Tanzania has had a multi-party democratic political system since 1992 and held four rounds of general elections between 1995 and 2010 . Tanzania’s economy includes services sectors (taking in transport), some manufacturing, fisheries and agriculture.

 

Donor aid is the single biggest contributor to the national budget. The contribution of extractive industries to the fiscal budget is, however, growing rapidly. In recent years the country has emerged as a resource haven. In addition to rich deposits of coal and natural gas Tanzania has significant deposits of heavy mineral sands; limestone; bauxite; rare earths; graphite; gold and base minerals, among others. Depending upon how they are managed, such natural resources could lift Tanzania into middle-income status.

Gas has been discovered in the southern region of Mtwara. Resource extraction necessarily has an impact on the environment and for that reason achieving complete environmental balance and harmony is to all intents and purposes impossible, nevertheless all activities should aim to limit any environmental degradation that might result. This approach is already addressed in law and in environmental impact assessments: maintaining environmental integrity should not be sidelined as the resource revenues threshold draws nearer and the stakes get higher.

The government should try to allay such fears through a genuine commitment to further developing these sectors, not only because they are activities that traditionally have supported livelihoods but also because of the risks inherent in over-reliance on exports of a single natural resource commodity. Gas and liquefied natural gas production will become a dominant revenue generator in Tanzania.

The massive investment followed by the infrastructure boom will transform the southern Tanzanian provinces, allowing the local governments to get involved. Tanzanians expect that this will facilitate and attract the entry of foreign investors, exploring not only the opportunities in the energy sector, but also other areas, such as chemical, power, manufacturing and mining.