Production volumes to the new transnational pipeline in October to production facilities at Madimba, the Mtwara to Dar es Salaam pipeline and the Kinyerezi Gas Receiving Facility stood at 33 mmscf/day.
This is from three of the five existing gas wells at Mnazi Bay that have been successfully brought on-stream with the fourth well 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 Q1 2016.
Production volumes into the Mtwara to Dar es Salaam pipeline are expected to reach 80 mmscf/day in Q4 2015.
Sales gas volumes of 1,032 mmscf were delivered to the new pipeline during October 2015 (an average of 33 mmscf/day) and a gross payment of $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$3.00 per million BTU, approximately US$3.07 per thousand cubic feet, rising in line with the US CPI industrial index commencing in 2016.
“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 80mmscf/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,” commented Wentworth Resources Managing Director Geoff Bury.
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 150MW new Kinyerezi-I power plant.
New infrastructure combined with Mnazi Bay gas expected to reduce average cost of power generation from $0.20/kWhr to $0.08/kWhr. The current selling price is $0.16/kWhr.
Maurel et Prom is the operator at the Concession with 48.06 percent through production, Wentworth 31.94 percent while the Tanzania Petroleum Development Corporation holds the remaining 20 percent.