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Tanzania to start tests on 542km long

new Mtwara-Dar gas pipeline

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The Songo Songo plant in Mtwara. A new gas pipeline that runs from Mtwara to Dar es Salaam is being tested. PHOTO |

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Tanzania to start tests on 542km long new Mtwara-Dar gas pipeline - Bu... http://www.theeastafrican.co.ke/business/Tanzania-tests-on-542km-long...

industrial use, vehicles, households and institutions from January 1 to December 31, 2017.

The China Petroleum and Technology Development Company which was awarded the contract to build the pipeline with
requisite facilities and was expected to complete construction work last year, faced technical challenges.

TPDC requires an appropriate tariff to service loans and recovery capital and operational costs of the project. The $1.2 billion
loan from Exim Bank met 95 per cent of construction cost and the balance of $61.27 million is TPDCs equity.

The project capital structure is 81 per cent debt and 19 per cent equity. TPDC has to get a reasonable return on investment as
it incurred capital costs of $213.223 million resulting in equity of $274.492 million.

The pipeline tariff will be reviewed every three years and the Gas Supply Company (Gasco), a subsidiary of TPDC, will be
the link between gas producers and users, responsible for processing, transport and distribution.

Gasco is expected to implement Dar es Salaam gas distribution in three years . There will be a penalty for a buyer who fails
take agreed amounts of gas to meet off-take or pay obligations. Payment will be on 15th working day from due date.

The new pipeline will enable gas from Mnazi Bay and Msimbati fields in southern Tanzania owned by Wentworth
Resources Ltd with Maurel Prom to be delivered to Dar es Salaam under an agreement signed with TPDC.

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