Exploration & Gas Monetization in East Africa

Large-Scale Gas Monetization Projects

Mnazi Bay Petrochemicals Project

New Mnazi Bay to Dar es Salaam Gas Pipeline

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 is expected to be completed by the end of 2104. The Mnazi Bay concession partners are entering into a contract to supply up to 130mmcf/d of gas following completion of the pipeline and 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. 

Mnazi Bay Petrochemicals Project

New Mtwara 400MW Gas-fired Power Plant

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 kilometers 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.

Mnazi Bay Petrochemicals Project

Mnazi Bay Petrochemicals Project

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:

  1. The Fertiliser value chain can be implemented on relatively small gas reserves;
  2. Fertiliser is a good match with development objectives in Tanzania as the country is a large importer of urea fertiliser, needed to support important cash crop exports;
  3. Methanol is attractive as it requires a relatively simple conversion process and has lower capital requirements for a similar sized investment; and
  4. The project would benefit from secure revenue streams from export of methanol to global markets.

Wentworth senior executives and directors are in favour of developing a petrochemicals project in line with Nexant's recommendation for the following reasons:

  1. Wentworth's Executive Chairman, Non-executive Director, and Managing Director have decades of experience developing large-scale gas monetization projects including the production of methanol, MTBE, LNG, and other value-added natural gas products;
  2. A project of this nature brings needed foreign direct investment, which provides infrastructure for incremental and ancillary economic growth, construction jobs, and highly-skilled permanent jobs;
  3. The Mnazi Bay Concession partners have the unique opportunity to develop a project inside a Production Sharing Agreement, which aligns the stakeholders and optimises project profitability; and
  4. Financing through export credit agencies and carbon offsets (the project consumes CO2) are often available for projects of this nature.

Wentworth, with the support of the Tanzanian government, is pursuing the development of this project and expects a Final Investment Decision immediately after the outcome of new exploration and appraisal drilling is known and full feasibility study and the Front End Engineering & Design (FEED) package are completed.