Ewura rejects TPDC’s proposals on indicative gas prices

The Energy and Water Utilities Regulatory Authority (Ewura) has turned down proposals for natural gas indicative prices submitted by the Tanzania Petroleum Development Corporation (TPDC).

TPDC had submitted indicative price proposals to Ewura on the basis of operational costs incurred when transporting and connecting natural gas to customers.

But Ewura natural gas director Charles Omujuni told The Citizen in an exclusive interview last week that TPDC indicative price proposals were rejected due to some irregularities and the failure to consider realities surrounding natural gas business in the world.

“TPDC designed indicative prices without considering realities in the global natural gas market. We have directed them to rectify the issues before we can recommend their proposals for a public hearing,” Mr Omujuni said.

But in a swift response, TPDC acting managing director Kapuulya Musomba refuted claims that their proposal was turned down by the regulator, saying there were only some minor technical and legal issues that needed to be sorted out before the process continues.

“Ewura and TPDC teams could not reach a common understanding over some minor technical and legal issues that we cannot disclose at this stage. So an agreement was reached to review the issues before the process can continue,” Mr Musomba said in a telephone interview.

Both sides declined to reveal the indicative prices that TPDC had forwarded to Ewura, but The Citizen is aware that the prices ranged between $4 and $6 per 1,000 cubic metres depending on the distance of the customers from the natural gas wells. Dangote, Tanzania’s largest cement maker located near by the natural gas fields of Mtwara, has proposed to buy gas at $4 per 1,000 cubic metres, according to media reports.

The fact that TPDC proposals were rejected well before the public hearing reveals the corporation’s lack of requisite expertise to calculate natural gas prices, according to Mr Omujuni.

He urged the petroleum development agency to seek assistance from experts in the Ministry of Energy and Minerals.

“They could even seek some technical assistance from outside the country,” Mr Omujuni advised.

But Mr Musomba told The Citizen that TPDC would use local experts because the country has had enough of them. According to him, TPDC issues with technical capacity were being addressed.

Tanzania has 57 trillion cubic feet natural gas reserves. The government-owned, 533km long pipeline brings gas from Madimba in Mtwara region to Dar es Salaam.

TPDC plans to connect the natural resource to hundreds of households to be used for domestic purposes and supply several planned filling stations where they would be used by cars transformed from fuel to natural gas utilising vehicles.

In January this year, TPDC told The Citizen that Sh430 billion would be spent for building a mega plant to facilitate transportation of natural gas to large-scale factories and households in Mtwara, Lindi, Kilwa and Dar es Salaam.