Only 15 per cent of the USD1.283 billion pipeline is currently being utilised three years after the facility became operational.
TPDC, the owner and operator of the pipeline meant to transport natural gas from the gas fields of southern regions of Lindi and Mtwara, is upbeat about the future of the project.
“In fact, it would have not been good for us if the pipeline capacity had been exhausted by now,” said TPDC managing director Kapuulya Musomba when contacted last week.
In his 2015/16 report, the Controller and Auditor General (CAG) warned that the government might fail to repay the loan acquired from Exim Bank of China because the pipeline is massively underutilised.
Earlier plans were to service the loan from gas sale agreements (GSAs) between TPDC and its customers. But as of now, TANESCO remains the sole major client using gas from the pipeline.
Plans are underway to expand natural gas use through connections to households, pumping stations to serve vehicles which use gas, and several factories in and around Dar es Salaam.
The pipeline has the capacity to transport 784 million cubic feet of gas per day, and Musomba said TPDC plans to reach this amount in about 10 years.
People need not be worried about unused capacity as many more clients have been lined up and the pipeline’s utilisation is set to increase in the near future, he similarly noted, citing an upcoming client as the Dangote cement factory in Mtwara.
There is also TANESCO’s Kinyerezi 1 extension project expected to be completed by mid this year, and at least seven other customers between Mkuranga and Dar es Salaam, all expected to be on board this year.
The pipeline was inaugurated in August 2015 and its
development included the construction of Madimba Processing Centre operated by the Gas Supply Co. Ltd (GASCO).
The pipeline and processing plant were part of a government programme to add over 2,000 megawatts of gas-fired electricity by 2018 and a total 10,000MW generation capacity by the year 2025, up from 1,500MW.
The gas to be used would come from the Mnazi Bay concession in Mtwara region, where Canadian firm Wentworth Resources and French operator Maurel & Prom hold an exploration and production franchise.
The basic aim was to reduce dependency on hydropower, representing 33 per cent of Tanzania’s power generation in 2014, and whose capacity had been affected by recurring droughts in the country.
The pipeline was funded by a $1.23 billion concessional loan awarded by Export-Import Bank of China, and constructed by the China Petroleum Technology and Development Corporation.