Dar es Salaam. The Tanzania Petroleum Development Corporation (TPDC) is planning to connect four factories to the natural gas pipeline this year to ensure adequate energy supply.
It named the factories as Dangote Cement in Mtwara, Bakhresa Fruit Processing Plant and Goodwill Ceramic Tanzania in Coast Region as well as Coca-Cola Company in Dar es Salaam. Processes of connecting the companies are on different levels of completion.
TPDC acting managing director Kapuulya Musomba told BusinessWeek in interview here that indicative prices by the Energy and Water Utilities Regulatory Authority (Ewura) were awaited to start the operations.
According to him, Dangote Cement has proposed to buy gas at $4 per 1,000 cubic metres while the current price is $5.14.
However, he said Ewura would announce the indicative price for all companies.
TPDC has sent its price proposals to Ewura indicating the price regarding the operation costs of connecting and transferring gas to a plant.
According to him, Ewura is planning to release the indicative price this month,
So far, 39 organisations have been connected to the gas pipeline since 2014.
According to Mr Musomba, factories using natural gas saved Sh1.65 trillion from July 2014 to September 2016.
The four companies which are intended to be connected this year will bring to 41 the total number of factories using gas.
From July 2014 to September last year 70 households, one hotel and 50 vehicles have been connected with natural gas in Dar es Salaam.
Statistics also show that more than Sh729.72 million has been saved for those households and vehicles using gas instead of other sources of energy during the period.
“We are reviewing the feasibility study done in 2012 to connect 30,000 households and 800 vehicles by 2017 in Dar es Salaam.”
The Sh327 billion project aims at covering 65km in Dar also to cover gas-filling stations.
The 2012 study identified locations where gas-filling stations would be constructed, but TPDC faced capital woes.
“Now we have funds for the project and we realised that there are a lot of changes in our 2012 study. That’s why it has become necessary to review the whole study. We’ll start in April,” he said. It will take five months to review the document.
Infrastructure for 15 gas-filling stations and two pipelines for connecting gas to 37,000 houses and 850 vehicles will be constructed in Dar es Salaam.
“Many people are willing to transform their oil-powered vehicles into gas-powered ones….with only one gas filling station at Ubungo, it is impossible for us to meet the increasing demand,” he insisted.
“We have observed several advantages of using natural gas in our pilot study of 70 houses at Mikocheni and 50 vehicles in the city that natural gas is cheaper than other sources.”
He said the use of natural gas had also prolonged vehicle service interval as a result savings in oil filters and garage costs.
Between 2005 and 2015, the government got Sh153.89 billion as sales profits of natural gas.
Between 2005 and 2014, the Tanzania Revenue Authority (TRA) got Sh13.07 billion as VAT from gas.
TPDC paid Sh227 billion taxes to the government.
Meanwhile, TPDC plans to drill a $20 million gas-well at Mtwara and one in Kilosa, Morogoro, this year.
Tanzania has natural gas deposits of 57 trillion cubic feet.
It plans to explore for one trillion cubic feet gas this year.
Plans are also underway to build a Sh430 billion mega plant to facilitate gas transport to large-scale factories and households.
More than 100, 000 households in Mtwara, Lindi, Kilwa and Dar es Salaam will be connected to gas for domestic uses.
“We have already conducted feasibility studies to put up the infrastructure to connect the areas and construction is due to start in this financial year,” he said, noting that the African Development Bank would finance the project.
The government plans to add more megawatts to the new gas-fired electricity generating power by 2018 to boost Tanzania’s generating capacity to 10,000 MW by 2025.