The government of the United Republic of Tanzania officially started construction of the Mnazi Bay to Dar es Salaam Gas Pipeline Project on Thursday, November 8, 2012. The 532 km long pipeline with carry Mnazi Bay gas along a 36" main line to Dar es Salaam and other major population and industrial centres. Construction and commissioning of the various components of the Gas Pipeline Project are expected to take place during Q2 2015. A long-term gas sales agreement to supply natural gas from the discovered gas fields to a new pipeline was executed in September 2014. The Company plans to produce up to 130mmcf/d of gas for delivery into the pipeline and hopes to increase that supply to 270mmcf/d within five years.
Selling gas into this coastal, transnational pipeline will be a significant event in the history of Wentworth. Since the discovery of the Mnazi Bay gas field in 1982 the substantial gas resources in this concession have been effectively "stranded". Gaining access to the greater markets of Tanzania is expected to allow full production from the Company's existing and future gas wells.
In February 2013 the Tanzania National Electrical Supply Company ("TANESCO") announced the Mtwara Power Plant Project. A U.S. consortium of General Electric International and Symbion Power have teamed up to build the US$1 billion project, which includes 400MW of electrical power generation and the expansion of the electrical power national grid by 650 km in the south of the country. In addition to providing power to the national grid the plant will supply electricity to a US$500 million, 300 million tonnes per annum cement plant under development by Nigeria's Dangote Group as well as other area projects to be announced. Construction is expected to begin in 2014 for commercial operations in 2017.
Another natural monetization solution for larger quantities of natural gas is a gas-to-petrochemicals plant. That type of project fits well with: the size of the known gas reservoirs; the expected quantity of future proven gas reserves; the concession area's proximity to a natural deep water port; and the needs of Tanzania and neighbouring countries for fertiliser and other gas derivatives.
In late 2010 Wentworth mandated Nexant, www.nexant.com, to conduct a screening study of all possible gas monetization solutions for Mnazi Bay gas. Nexant selected methanol and ammonia/urea production as the most appropriate monetization option and cited the following reasons for their conclusion:
Wentworth senior executives and directors are in favour of developing a petrochemicals project in line with Nexant's recommendation for the following reasons: