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 take approximately 18 months to complete. 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.
On October 13, 2011 Reuters reported that the government of Tanzania secured a loan in the amount of US$684 million from Exim (Export-Import) Bank of China to build a new 300-megawatt gas-fired power plant at Mnazi Bay. The plant is to be built by China National Machinery & Equipment Import & Export Corporation (CMEC) and Siemens of Germany. The project is expected to start in the 2011/12 financial year. Tanzanian electric utility, TANESCO, has already requested a gas allocation of up to 75mmscf/d for the project and a Gas Sales/Purchase Agreement is pending execution.
Another natural monetisation 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 monetisation solutions for Mnazi Bay gas. Nexant selected methanol and ammonia/urea production as the most appropriate monetisation 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:
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.