In a statement, the company said it is happy with timely payment of bills by Tanzania Petroleum Development Corporation, which it entered into a gas sales agreement last September.
“Further to the company's announcement on November 4, 2015, that gas deliveries to the new transnational pipeline had commenced and production volumes were ramping up, Wentworth reports that fourth quarter of 2015 gross gas production into the pipeline and directly to a power plant in Mtwara averaged 46 MMscf/d, with production averaging 55 MMscf/d during the month of December 2015,” the statement reads in part.
The Oslo Stock Exchange listed company and London Stock Exchange alternative investment market, said growing gas demand from the power sector has been impacted by delays experienced in commissioning the new Kinyerezi power plant and the conversion of the Ubungo power plant from diesel to gas.
“These delays are considered to be short term in nature and all of the power generation facilities that will utilize Mnazi Bay gas in the generation of electricity are expected to become fully operational during Q1 2016,” the statement added.
The company further noted that its existing Mnazi Bay gas wells continued to perform in line with expectations and were anticipated to be more than capable of meeting expected demand hence no new development wells are currently planned for 2016.
“Payments by the buyer, Tanzania Petroleum Development Corporation to the Joint Venture, for gas sales delivered to the new pipeline have been consistently paid in accordance with the agreed terms.
“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,” the statement stressed.
The company’s Managing Director, Geoff Bury, said the commissioning of the pipeline and the gas offtake facilities have all gone smoothly and that the Mnazi Bay wells have performed as expected.
“The joint venture's position as the main feedstock for the new gen-sets in Tanzania provides a unique position from which to benefit from the growing demand for power.
Moreover, the expectation of increasing production without the need for additional capital expenditure will further enhance our rapidly strengthening financial position,” Bury said.
"The newly elected government has demonstrated its commitment to the future growth and development of Tanzania's power industry and continues to work diligently to enable new and existing power plants to become fully operational in the coming months," the Wentworth Managing Director concluded.