Professional Documents
Culture Documents
20 21 October 2016
Organisers
Ministry of Energy and Minerals, Tanzania (MEM) (www.mem.go.tz)
Institution of Engineers Tanzania (IET) (www.iet.co.tz)
Tanzania Petroleum Development Corporation (TPDC) (www.tpdc-tz.com)
Energy and Water Utility Regulatory Authority (EWURA) (www.ewura.com)
University of Dar es Salaam (UDSM) (www.udsm.ac.tz)
1 TOGACE - 2016
Foreword
FOREWORD
This Book of Abstracts contains among others the conference program,
exhibitions map and abstracts of the papers for the 4th Tanzanian Oil and Gas
Conference and Exhibitions (TOGaCE-2016). The event is co-organized by
the Ministry of Energy and Minerals, the Institution of Engineers Tanzania, the
Tanzania Petroleum Development Corporation, the Energy and Water Utilities
Regulatory Authority and the University of Dar es Salaam.
The purpose of the event is to bring together interested individuals from the
government, its institutions and the general public, private sector including
oil/gas companies, the financial institutions, the academia and other interested
stakeholders to deliberate on matters relevant and of interest to the oil and gas
industry covering the regulatory and institutional framework, investment and
expectations, corruption vulnerability of the sector, upstream, mid-stream and
downstream activities, transparency, tax and taxation, technologies for valu
addition, contracts and agreements and related issues. The event is therefore
expected to provide a platform for sharing of experiences and explore ways in
which the oil and gas industry in Tanzania can be developed more inclusively
for the benefit of the whole nation without compromising the safety and
environmental issues.
The conference and exhibitions focus is thus on the growth of the industry in
Tanzania. Specifically the conference dwells on: (1) Status of investment in
oil and gas sector in Tanzania (Upstream and Downstream) - past, present
and future. (2) Technologies for value addition of natural gas - experiences
from other countries (3) Utilization of natural gas present and future (4) Gas
Policy and Local Content Policy - opportunities and challenges for their
implementation (5) Regulatory framework, strategies and institutional
arrangement (6) and the World energy outlook the future of natural gas in
the energy mix.
22 TOGACE - 2016
Foreword
spectrum of fields within the above listed topics originate from international
companies operating in and outside Tanzania as well as national institutions.
On behalf of the organizing committee, I would like to thank all the authors
and exhibitors for preparing papers/posters and for being ready to share with
the participants. I would also like to express my gratitude to all sponsors for
their cooperation and generous support which made the conference and
exhibitions possible. Lastly, I wish to thank the session chairs for accepting
the responsibility and all participants for anticipated positive contributions
and/or constructive criticisms.
Once again thank you for participating in the TOGaCE-2016 and let me wish
you all fruitful deliberations and enjoyable stay in Dar es Salaam.
Abraham K. Temu
Chairman, TOGaCE-2016
3 TOGACE - 2016
3
Contents
TABLE OF CONTENTS
FOREWORD ............................................................................................................. 2
TABLE OF CONTENTS .......................................................................................... 4
CONFERENCE PROGRAMME............................................................................. 6
SESSION A2: Theme: Status of Investment in the Oil and Gas Sector in
Tanzania (Upstream, Mid and Downstream) Past, Present and Future ......... 14
Keynote Presentation 1: Investment and Expectations in the Oil and Gas Sector 15
Paper 1: Tectono-Sedimentary Evolution of East Africa Continental Passive
Margin: A Case Study of Block 5 in deep offshore Tanzania ............ 16
Paper 2: Natural Gas Supply Infrastructure in Tanzania: Implications of
Increased Demand ............................................................................... 17
Paper 3: Competitive Advantages of Oil and Gas Sector in Tanzania: Proactive
Corporate Environmental Strategy...................................................... 19
Paper 4: Shaping A Legal Framework For A Viable LNG Development in
Tanzania .............................................................................................. 22
Paper 5: Hydrocarbon Potential for TPDC Blocks 4/1B and 4/1C Offshore .... 24
SESSION A3: Technologies for Value Addition of Natural Gas Experiences
from Other Countries.............................................................................................. 26
Keynote Presentation 2: Oil and Gas Economy: An Ambivalent Path for Tanzania
............................................................................................................ 27
Paper 6: Natural Gas Modes of Transportation for Tanzania ........................... 28
Paper 7: Upstream Concept Selection for Tanzania Deep Sea Gas .................. 29
Paper 8: The Natural Gas Market-what should be done in Tanzania? .............. 31
Paper 9: Present Oil exploration focus in the Eyasi-Wembere Block by recent
Airborne Gravity Gradiometry and aeromagnetic survey ................... 33
SESSION A4: Gas Policy, Local Content Policy Opportunities and Challenges
for Their Implementation ....................................................................................... 35
Keynote Presentation 3: Corruption in The Oil and Gas Sector: Impact.............. 36
Paper 10: Skills Gap Analysis for Oil And Gas Development In Tanzania ........ 37
Paper 11: Statoil Sustainable Capacity Building Programs in Higher Learning
Education in Tanzania......................................................................... 38
Paper 12: Gas Policy and Local Content Policy For Their Implementation ....... 39
SESSION B1: Regulatory Framework, Strategies and Institutional
Arrangements .......................................................................................................... 41
Keynote Presentation 4: Transparency in the Oil and Gas Sector: Challenges and
Opportunities....................................................................................... 42
TOGACE - 2016
44
Contents
Paper 13: Value chain around major projects in the O&G sector ......................... 43
Paper 14: Tanzania Block 2 Subsea to Shore Development ............................. 44
Patrice Aguilera ........................................................................................................ 44
Paper 15: Analysis of the Regulatory Framework and Institutional Arrangement
in the Tanzania Petroleum Act, 2015 .................................................. 45
Paper 16: Natural Gas Pricing and Policy for Fertilizer Production; Experience
from Other Countries .......................................................................... 47
SESSION B2: Utilization of Natural Gas Present and Future / Other
Crosscutting Issues of Health, Safety Environmental and Related .................... 48
Keynote Presentation 5: Tax and Taxation in the Oil and Gas Sector .............. 49
Paper 17: Utilization of Natural Gas - Present and Future (Tanzanian
perspective) ......................................................................................... 50
Paper 18: Natural Gas Utilization in Tanzania Beyond Energy Use ............... 52
Paper 19: Utilization of Natural Gas Present and Future ................................. 54
Paper 20: Health, Safety and Environmental (HSE) Issues of Concern and
Preparedness in the Oil and Gas Industry in Tanzania ....................... 56
SESSION B3: The World Energy Outlook and the Future of Natural Gas in the
Energy Mix ............................................................................................................... 58
Keynote Presentation 6: Tanzania Petroleum Contracts and Agreements in
Broader Context .................................................................................. 59
Paper 21: The Effect of Gas to Liquid Fuel on GDP: A Case of Mozambique .. 60
Paper 22: Making Hydrocarbon Extraction Work for Tanzania: What Role can
Community Engagement Play? ........................................................... 61
Paper 23: Natural Gas Vehicles: A Review of Best Practices around the World
and Challenges Facing Tanzania......................................................... 63
Paper 24: Metrology Infrastructures in The Development of Oil and Gas
Industry in Tanzania: Perspective From The Current Natural Gas
Reserves in Tanzania .......................................................................... 65
Paper 25: Compressed Natural Gas for Dar es Salaam City Transport............... 68
R. Rwechungura1 and G.D Mrema2......................................................................... 68
Paper 26: Incidence of Medical Conditions Associated With Up/Down Stream
Oil and Gas Explorations In Tanzania; A Guide Towards Appropriate
Onsite Medical Support Setup ............................................................ 70
SESSION B4: LAYOUT OF EXHIBITION BOOTHS ....................................... 71
5 5
TOGACE - 2016
Programme
CONFERENCE PROGRAMME
Time Program/Responsible
Registration
7.00-09.00
Secretariat, Organizing Committee, TOGaCE-2016
Introductory Remarks
9.00-09.05 Prof. Abraham K. Temu, Chairperson
Organizing Committee, TOGaCE-2016
Welcome Note
9.05-09.15 Prof.Rwekaza Mukandala, VC
UDSM
Opening Speech
9.15-09.35 Prof. Justin W. Ntalikwa, Permanent Secretary,
MEM
Vote of Thanks
9.35-09.40 Mr. Felix Ngamlagosi, Director General
EWURA
Presentation of Trophies and Certificates to Sponsors
9.40-9.50 Prof. Justin W. Ntalikwa, Permanent Secretary,
MEM
Presentation of Products/Services
9.50-10.05
Tanzanite, Diamond and Sapphire Sponsors only
Group Photos
10.05-10.15
The Logistics Sub-Committee, TOGaCE-2016
SESSION A2: Theme: Status of Investment in the Oil and Gas Sector in
Tanzania (Upstream, Mid and Downstream) Past, Present
and Future
6 TOGACE - 2016
6
Programme
Keynote Presentation 1:
Investment and Expectations in the Oil and Gas Sector
10.45-11.05
Author/Presenter: Mr. Singili, C., CEO, Tanzania Investment
Bank (TIB)
11.05-11.15 Discussion
Paper 1
Tectono-Sedimentary Evolution of East Africa
11.15-11.30 Continental Passive Margin: A Case Study of Block 5
in deep offshore Tanzania
Author: Venance Emanuel Mboya, TPDC
Paper 2
Natural Gas Supply Infrastructure in Tanzania:
11.30-11.45
Implications of Increased Demand
Author: Charles Jimmy Sangweni, TPDC
Paper 3
TRACK SESSIONS
7 TOGACE - 2016
7
Programme
14.20-14.30 Discussion
Paper 6
14.30 14.45 Natural Gas Modes of Transportation for Tanzania
Author: Adela Syikilili and Abraham Temu; Department of
Chemical and Mining Engineering, UDSM
Paper 7
14.45 15.00 Upstream Concept Selection for Tanzania Deep Sea Gas
Author: Fellix Nanguka, TPDC
Paper 8
The Natural Gas Market-what should be done in
15.00 15.15 Tanzania?
Author: Emma S. Msaky; President's Office, Oil and Gas
Advisory Bureau (OGAB)
Paper 9
Present Oil exploration focus in the Eyasi-Wembere Block
15.15-15.30 by recent Airborne Gravity Gradiometry and
aeromagnetic survey
Author: Sindi Maduhu Gumha, TPDC
Paper 10
Skills Gap Analysis For Oil and Gas Development in
16.50 17.05 Tanzania
Author: Happiness N. Mgalula, Josiah A. Mwabeza,
EngOmari Athumani, Chacha Nyamuhanga, and David
Mwankenja, Planning Commission
Paper 11
17.05 17.20 Statoil Sustainable Capacity Building Programs in Higher
Learning Education in Tanzania
Author: Ghati Mwita and Richard Rwechungura, STATOIL
Paper 12
Gas Policy and Local Content Policy For Their
17.20 17.35 Implementation
Author: E. Kavana; Acacia Mining PLC, Technical Services,
Department of Geology
Time Program/Responsible
9 TOGACE - 2016
9
Programme
08.50-09.00 Discussion
Paper 13
Value chain around major projects in the O&G sector
9.00-09.15
Author: Maina Kigundu, East Africa Head, Oil & Gas,
Stanbic Bank
Paper 14
09.15-09.30 Tanzania Block 2 Subsea to Shore Development
Author: Patrice Aguilera, STATOIL
Paper 15
Analysis of the Regulatory Framework and Institutional
09.30 09.45
Arrangement in the Tanzania Petroleum Act, 2015
Author: John G Mgayambasa, TPDC
Paper 16
Natural Gas Pricing and Policy for Fertilizer Production;
09.45-10.00
Experience From Other Countries
Author: Diana Byonge and Lwaga Kibona, UDSM/TPDC
10.00-10.30 Discussions
10 TOGACE - 2016
10
Programme
Paper 17
11.30 11.45 Utilization of Natural Gas - Present and Future
(Tanzanian Perspective)
Author: Gabriel N. Bujulu, P. O. Box 31437 Dar es Salaam
Paper 18
11.45 12.00 Natural Gas Utilization in Tanzania Beyond Energy Use
Author: Abraham Temu and Adela Syikilili, Department of
Chemical and Mining Engineering, UDSM
Paper 19
Utilization of Natural Gas Present and Future
12.00 12.15
Author Eng. Norbert A. Kahyoza and Ebeneza P. Molle;
EWURA/MEM
Paper 20
Health, Safety and Environmental (HSE) Issues of
12.15 12.30 Concern in the Oil and Gas Industry in Tanzania
Author: Godwill D Mrema, Tumaini University, Dar es Salaam
College TUDARCo
11 TOGACE - 2016
11
Programme
12 TOGACE - 2016
12
Programme
13 13
TOGACE - 2016
Status of Investment in the Oil and Gas Sector in Tanzania
14 TOGACE - 2016
14
Status of Investment in the Oil and Gas Sector in Tanzania
Introduction
My discourse focuses on investment and expectations in the oil and gas sector
centring on status of investment in middle and downstream.
Markets and experts alike in this sector are gradually coming to the
realization that the gas industry offers a number of investment prospects and
as such there is need for anyone setting up gas related businesses in Tanzania
to ensure that they are well prepared and have all investment plans,
understand the regulatory environment, negotiations and be well informed on
the risks pertaining to sector to help them manage expectations.
As one of the few growing sectors in the source of energy, raw material (i.e.
natural gas is known to be a major feedstock for the production of ammonia,
via the Haber process, for use in fertilizer) production for fertilizers and other
hydrocarbons related products and source of revenue, oil and gas sector in
Tanzania like in any other countries blessed with this resources in the world
is bound to attract a lot of attention. Tanzania is looking to its growing oil and
gas sector to make up some of the inevitable deficit in its power production
capability among other uses such as fertiliser etc.
This paper begins by setting a background on world and regional oil and gas
industry outlook to help position Tanzanias case for entry and expectations
on the gas economy, and then looks at investment and expectations.
This paper therefore undertake to consider the role that TIB Development
Bank should perhaps play in financing or arranging to fund long-term
business or projects in the oil and gas industry particularly in the middle and
downstream segments. These are especially appropriate at this time when
Tanzania organizes itself to enter into the club of nations of gas-led
economies. We understand Tanzanians expectations following gas discovery
are very high.
15 TOGACE - 2016
15
Status of Investment in the Oil and Gas Sector in Tanzania
TPDC
Abstract
This paper is on 3D-structural-sediment modelling to unravel the evolution of
the Eastern Africa Continental Passive Margin (EACPM) based on
interpretation and analysis of 2D-seismic data set from Block 5 offshore
Tanzania, eastern Coast of Africa.
Block 5 is within the Deep water Jurassic Mafia Basin which is hydrocarbon
prolific zone known by its recently huge gas discoveries in the region (Petzet,
2012) and yet more discoveries are underway. This potential is due to its
historical structural-sediment interactions (Lambiase and Bosworth, 1995) the
consideration of which has influenced this study using 46 SEG-Y format 2D-
seismic seismic sections from deep-offshore Tanzania importantly for
analyses of the hydrocarbons prospectivity in the region.
16
16 TOGACE - 2016
Status of Investment in the Oil and Gas Sector in Tanzania
Abstract
The use of natural gas in Tanzania started in July 2004, after completion of
the first infrastructure consisting of 70mmscfd capacity Processing plant at
Songo Songo together with a 247km, 24 pipeline from Songo Songo gas
fields to Dar es Salaam, with a capacity of transporting up to 105mmscfd
(without compression). This infrastructure was constructed to supply gas for
power generation at Ubungo Songas power plant. In the course of supplying
gas to power project, some additional consumers which includes 39
industries, 70 households and 1 institution together with a hotel were
identified. To date about 100mmscfd of gas is supplied to different users
through this infrastructure.
17 TOGACE - 2016
17
Status of Investment in the Oil and Gas Sector in Tanzania
18
18 TOGACE - 2016
Status of Investment in the Oil and Gas Sector in Tanzania
Abstract
Managing the environment sustainably is a continuing leadership challenge to
industrial performance and natural capital, inclusive human resource base in an
industrial criteria setting such as that of Tanzania Oil and Gas Sector. The global and
local industrial and sectoral environmental issues policies and practices, all lies in
the hands of human resources inclusive strategy. The planning, staffing,
compensation as well as employer/employees relationship together with appraisal,
training and development policies are profoundly significance on organizational
environmental performance.
Historically, the roles and responsibilities of Environment, Health and Safety (EHS)
professionals have been solely focused on managing the wastes resulting from the
industrial performances. This model of management concentrated on wastes and
pollution preventioncontrol within the respective legislation and regulatory
certification. In contrast, proactive environmental management goes far beyond
compliance as a factor of environmental responsibility. It implements the
environmental strategy in its broader sense, inclusive its extended future impacts of
each and every challenges on organization success and continuous performance.
While corporate environmental strategy drivers are corporate culture, structure and
green innovativeness on corporate performance. The drivers for proactive corporate
environmental strategy are regulatory demands, cost factors, competitive
requirements and stakeholders forces.
19 19
TOGACE - 2016
Status of Investment in the Oil and Gas Sector in Tanzania
The environmental issues likely to be found in the Tanzania Oil and Gas S (O&G)
sector are aquatic impacts particularly the aqueous waste stream like produced water,
drilling fluids, cuttings and well treatment chemicals but also cooling water, spillage
and leakage are pollutants as well. The atmospheric impacts of O&G involves
flaring, venting and purging gases, combustion processes in diesel engines and
turbines, fugitive gases from loading operations and tank and losses from processes
equipment and particulate matters from soil disturbances during construction and
burning sources. The physical disturbances resulting from construction activities; the
spillage and leakage as well as waste disposal are drivers of terrestrial impacts of
O&G sector. These are likely to cause soil erosion, changes in surface hydrology and
drainage patterns, increased salination and habitat destruction, therefore plummeting
environmental capacity to support wildlife and vegetation. The sector is further
attributed to potential emergencies that are mainly due to spillage of gases, oil, fuels,
chemicals and hazardous materials. In O&G fires and explosions can likewise be
sources of emergencies; other causes are oil or gas well blowout.
The changes in an ecosystem patterns in areas where O&G are under exploration,
extraction and or transportation; the industry is responsible for changes in GHG
content in the atmosphere, changes in habitat type and size hence likely impact on
species typology and richness. The changes in migration routes, food chain and
nutrient contents, upsetting microbial activity in the soil due to salination and soil
disturbances have an impact on ecology and social-ecological systems in the area.
The operationalization of Tanzania O&G sector has come with new challenges on
social-ecological system, the urbanization processes. The rate of urbanization in
Mtwara and surrounding towns is surely not the same as it was in just few years ago.
Vegetation cover clearance is taking place for the purposes of putting modern and
enough infrastructures that will support the rural-urban migration rate, currently
happening. The investment opportunities though opened and created a number job
20 TOGACE - 2016
20
Status of Investment in the Oil and Gas Sector in Tanzania
21 TOGACE - 2016
21
Status of Investment in the Oil and Gas Sector in Tanzania
Are L. Brautaset,
Abstract
Statoil Tanzania AS (Statoil) and partner ExxonMobil in Block 2, which is located
about 100 km offshore South Tanzania at a water depth of approximately 2500
meters, have discovered about 22 trillion cubic feet (tcf) of natural gas. BG
Tanzania, now Shell, and its partners in Blocks 1 and 4, Ophir and Pavilion Energy,
have made discoveries in their blocks that combined are of the same magnitude.
These discoveries are sufficient to support a multi-train land based LNG project and
to provide for deliveries of substantial quantities of natural gas to the domestic
market.
At the request of the Government of Tanzania (GoT), the Block 2 and 1 & 4 partners
(the IOCs) together with TPDC are planning for a joint LNG development. If
realized, the integrated development of block specific offshore projects and a joint
onshore LNG plant Tanzania Gas & LNG Projects (TGP) would play a positive
part in the growth of the Tanzanian economy. It would represent an investment of
about USD 30 billion for the first phase, depending on the size of the LNG facilities.
TGP would offer significant long term benefits to Tanzania through direct revenues,
increase in Gross Domestic Product (GDP), domestic gas supply, local content and
capacity building as well as other more indirect effects. These benefits will vary as
the project evolves into the construction phase followed by the long term (25-40
years) production and operation phase.
The foundation for monetising the deep sea gas discoveries and enabling domestic
gas supply requires (i) robust technical development concepts at competitive costs,
(ii) stable terms and framework conditions supporting a commercial development
and (iii) positive LNG and natural gas market outlook. The presentation will focus
on the second element and discuss what is needed to create a sustainable
commercial, fiscal and legal framework for a viable gas and LNG development.
required for a complex and integrated gas and LNG development. It is therefore
proposed that a Host Government Agreement (HGA) between the GoT and the
sponsors (IOCs and TPDC) is established to provide for the tailor-made solutions
and the predictability required, and that certain modifications/supplements to the
PSAs are made.
The PA15 is an important milestone for Tanzania. Its provisions do, however, not
fully cater for an integrated value chain development such as TGP. Furthermore,
many provisions of PA15 are vague, inconsistent or insufficient. In order to underpin
the terms agreed in the HGA (and the PSA supplements), it is suggested that
bespoke legislation, in the form of a project law, is enacted. Where required the
project law will derogate from PA15 and other applicable legislation, including tax
laws.
The HGA, similarly to the PSAs, will be an investment agreement. The content of
the HGA will build on the PSAs but take into account the differences in the type of
activity undertaken under the agreement, for instance will the economic model for
the LNG plant be based on a tolling tariff and not on production sharing. The
purpose of the HGA will be to secure a financeable LNG project and lifetime stable
and reliable framework conditions. Key elements of the HGA will be:
For long term, complex and capital intensive LNG projects such as the Tanzania Gas
& LNG Project, which typically is one of a kind in a country, an investment
agreement as the proposed HGA and project specific legislation is common practice.
For the Tanzania Gas & LNG Project reaching agreement on the HGA is now on
critical path. Execution of the HGA is a pre-requisite for the sponsors for initiating
the Front End Engineering and Design (FEED) phase. The project law will then need
to be enacted before the project enters the construction phase, which will follow a
positive Final Investment Decision (FID).
23 TOGACE - 2016
23
Status of Investment in the Oil and Gas Sector in Tanzania
Asiadi R. Mrutu
subsequent passive margin setting. The tectonic setting was closely linked to
the Gondwanaland break-up during Permo-Triassic period. Four mega-
sequences have been identified i.e. Pre-rift phase (Karoo phase), Syn-Rift
Phase, Post-Rift phase and recent East African Rift System. The sequence
boundaries were used to control the extrapolation for the reservoirs from
nearby discoveries. The extrapolation for the reservoirs is supported by the
clear evidence that, the deposition for Ruvuma Channel extends to the deeper
part offshore southern Tanzania bypassing Davie Ridge Fracture Zone.
In this study the stratigraphic and structural model were integrated with the
extrapolated reservoir rocks and used to define the sub-surface geological
model. This model was used as the bases for plays and prospects mapping
from which nine prospects were mapped followed by producing detail
structural contour map for each prospect. Initial results indicating that the two
Blocks are highly prospective with the prospect mapped with large volumes
compared to the surrounding gas field.
Keyword: TPDC Blocks 4/1B and 4/1C ,
25 TOGACE - 2016
25
Technologies for Value Addition of Natural Gas
TOGACE - 2016
26 26
Technologies for Value Addition of Natural Gas
REPOA, 157 Mgombani Street, Regent Estate, P.O. Box 33223, Dar es
Salaam, Tanzania, Website: www.repoa.or.tz
Abstract
The divergent development outcomes in resource rich countries raise the need
to question the scope of our understanding and translating the notion of oil
and gas economy, which appears to be very divergent too. Recent
discoveries of natural gas in Tanzania have led to a widespread belief that
Tanzania is heading towards a gas economy. There has not been consensus,
however, of what gas economy implies, and if, in this case, substance prevails
over form. Drawing on the desk review of literature and available data on the
trends in the oil and gas industry and selected indicators in six resource-rich
countries, this paper argues that the economic, social, and political outcomes
of endowments in oil and gas depends on how these resources are exploited,
utilized, and distributed. It further argues that, gas economy is not to be
viewed as an enclave economy, but rather as an integrated whole in which the
economy transforms towards a diversified and resilient economy, bringing
along it generalized social progress - reduced poverty, equitable growth in per
capita income, and stable and secure population.
27 27
TOGACE - 2016
Technologies for Value Addition of Natural Gas
Abstract
Tanzania is one of the countries with substantial discoveries of natural gas
reserves. As of June 2015, Tanzania had offshore fields with about 47.08 tcf
and onshore fields with about 8 tcf. Currently, there is production of about
150MMscf/day from two onshore fields of SongoSongo and Mnazi Bay. It is
planned that about 90% of the natural gas from the deep sea fields will be
exported as LNG and the remaining portion will be utilised within the
country. Although the local market for natural gas is still small it is expected
to grow very soon and fast. Currently, natural gas utilisations includes:
generation of electricity; industrial heating mainly in Dar es Salaam region
and CNG for vehicles (only one station) and hotels where piped natural gas
(PNG) is not available. The gas fired power plants produce about 50% of the
electric power produced in the country; the remaining proportion being from
hydropower (40%) and diesel fired plants (10%). There are plans to extend
natural gas utilisation within the country to supplement other used forms of
energy like charcoal and firewood which are not environmental friendly. In
doing so, a wise selection of natural gas transportation modes need to be
done.
This paper aims at describing natural gas transport modes which can be
applied within Tanzania. Factors affecting transportation modes considered
are distance, demand volume, present reserves, technology challenges,
capital, gas field location, operation costs and safety issues. It is assumed that
the natural gas will be transported from Mtwara region to other regions of
Tanzania as far as Kagera where the longest distance considered is 2000 km.
PNG, GtW, CNG, NGH, and micro LNG are considered in this discussion.
A short description of each method is presented in this paper together with
their comparisons. The discussion is based on different factors affecting each
method such as cost (initial and operational cost), payback period,
infrastructure needed, safety issues, level of employment opportunities,
market required and flexibility of delivery. Considering these factors, most
appropriate method for Tanzania situation is recommended. In addition, the
paper discusses opportunities likely to be offered by each natural gas
transportation mode.
28 TOGACE - 2016
28
Technologies for Value Addition of Natural Gas
Abstract
Tanzania has made a huge discovery of Natural Gas in the deep sea
(offshore). To commercialize these resources will require a proportion of the
gas, in the form of liquefied natural gas (LNG), to be exported for sale in
international markets. Two operating companies (with their respective
partners) discovered these resource in three different licensed Blocks.The
Government of Tanzania (GoT) has meanwhile requested the companies to
cooperate in developing an onshore joint LNG plant. Each of the offshore
block (1, 2 and 4) will be developed as stand-alone projects and then to form
the onshore integrated LNG project constituted by all upstream gas
developers.
The Tanzania Gas & LNG project is planned to pass through several phases
before first gas being produced. The planned phases include: Land/Site
Acquisition; Pre- Front End Engineering Design (Pre-FEED); Front End
Engineering Design (FEED); Final Investment Decision (FID), Construction
phase and finally the first gas being produced leading to the first LNG train
takeoff.
The rationality of the project is attained by evaluating technical and
commercial viability. Technical aspect of the project has progressed to the
level that, upstream development concept for two blocks have been chosen
and further studies are going on to delineate the viable concept for the
remaining Block. The commercial aspect of the project has not progressed
much as GoT and International Oil Companies (IOCs) are yet to engage in
Host Government Agreements (HGA) negotiations. The HGA has many
agreements that IOCs and Host government have to enter with in respect to
the upstream development, construction and operation of a project to
minimize the financial and political risks posed to foreign investors as a result
of sudden changes in governing law as well as governing rights and
obligations of the parties. Once HGA is signed, the project will develop to the
Pre- FEED and subsequent phases as elaborated above.
29 TOGACE - 2016
29
Technologies for Value Addition of Natural Gas
This paper will deliberate the concept selection studies for the upstream
development Blocks as done by IOCs. The Technical, Economical and other
non-technical criteria for what entails in the concept select have been
discussed subsequently the selected concept for Tanzanian LNG project was
established.
30
30 TOGACE - 2016
Technologies for Value Addition of Natural Gas
Emma S. Msaky
President's Office, Oil and Gas Advisory Bureau (OGAB),
P. O. Box 9120, Dar es Salaam. TANZANIA
E-mail: emmaeliona2012@gmail.com
Abstract
With the economy becoming more and more competitive, having right
knowledge about the concerns and preference of natural gas customers in
Tanzania and regionally is critical. Unequivocally, strategic natural gas
market research in Tanzania will help in identifying new business
opportunities, target the interest of current potential customers and thus
increase sales of the Tanzanian natural gas. This will result into increase in
revenues and thus economic growth. Also, strategic natural gas market
research in Tanzania is the best way to reveal new potential customers,
increase current potential customers satisfaction, capture the available local
and regional market, understand the factors that affect the natural gas
business and elevate natural gas business performance in the country. More
importantly, strategic natural gas market research in Tanzania will stimulate
establishment of new industries (locally) which will utilize natural gas as a
31 TOGACE - 2016
31
Technologies for Value Addition of Natural Gas
32
32 TOGACE - 2016
Technologies for Value Addition of Natural Gas
Abstract
East African Rift System is a focal point for Oil exploration in East Africa.
Following discovery of Oil at Albertine basin in Uganda and Turkana in
Kenya, Tanzania is currently focusing on the Eyasi-wembere Basin which
have nearly similar Characteristics/formation.The study of basin architectures
in the rift is of great important due to Hydrocarbon discovery in other rift
areas which contributes up to 30% of hydrocarbon global discovery.
Progress has been made to understand the evolution of the rift system and
Sediment accumulation. The Eyasi-Wembere basin is among the
asymmetrical, extensional rift basins that have developed along the eastern
arm of the East African Rift System (EARS). Little was known on the intra-
basin structures and faults bounding the basin. Stratigraphy of the
sedimentary deposits in the rift basin still unknown due to lack of exposure of
rocks. A thick volcanoclastic sediments and fluvial-lacustrine sediment may
be overlying potential reservoir and source rocks in the area.
33 TOGACE - 2016
33
Technologies for Value Addition of Natural Gas
are expected to be the Plays/traps in the area. Priority areas with deep
sediments for further exploration/detailed follow-up and seismic surveys are
clearly defined. The depth of sediments in the identified areas are deeper
enough for oil generation and accumulationand thats why this basin is
ranked high for investment in oil exploration.
34
34 TOGACE - 2016
Gas Policy, Local Content Policy
35 35
TOGACE - 2016
Gas Policy, Local Content Policy
CEO, (PCCB)
36
36 TOGACE - 2016
Gas Policy, Local Content Policy
Paper 10: Skills Gap Analysis for Oil And Gas Development
In Tanzania
Happiness N. Mgalula, Josiah A. Mwabeza, Eng Omari Athumani, Chacha
Nyamuhanga, and David Mwankenja
10 Kivukoni Front, PO.BOX 9242, 11405 Dar es Salaam, Tanzania.
hmgalula@gmail.com, mwabeza@gmail.com, oathumani@yahoo.com,
cnyamuhanga@gmail.com, nkenja1@yahoo.co.uk,
Abstract
Despite the potential for massive socio-economic transformation associated
with significant natural gas discoveries, these discoveries on the other hand
pose more challenges on effective and efficient management of the industry
in order to maximize countrys benefit. Amongst these challenges is the
shortage of skills needed for Tanzanians to participate effectively in the oil
and gas industry. This situation poses a serious concern on the extent to
which these discoveries can results into significant and long lasting socio-
economic benefits to the large segment of the population. This paper
therefore intends to analyze skills gap in the Tanzania oil and gas subsector
along with oil and gas skills development initiatives and advise the
Government and other key stakeholders on the appropriate interventions to
address the impending skills gap and promote local content.
Study findings unveiled existence of skills gap in the oil and gas industry in
Tanzania; absence of nation-wide Skills Needs Assessment (SNA) in the oil
and gas industry; limited coherence and complementarities between oil and
gas skills development interventions undertaken and absence of nation-wide
natural gas human resources and skills development strategy. To address the
skills gap, the paper recommends for: carrying out nation-wide oil and gas
Skills Needs Assessment (SNA); developing national strategy for oil and gas
skills development; and reviewing and upgrading academic and technical
curriculum to cater for oil and gas industrys skills needs.
Keywords: Oil and Gas, Skill Gap, Local Content Skills Needs Assessment
(SNA)
37 37
TOGACE - 2016
Gas Policy, Local Content Policy
Abstract
Statoil approach towards institutional capacity building in Tanzania is
modeled on supporting collaboration and technology transfer between
Tanzanian universities and more experienced international universities in the
sector so as to enable local institutions to offer quality petroleum related
programs. Up-to-date, Statoil has initiated and supported collaboration
between University of Dar Es Salaam College of Engineering and
Technology (COET) and the Norwegian University of Technology (NTNU),
University of Dodoma (UDOM) and University of Barcelona, University of
Dar Es Salaam Business School (UDBS) with University of Stavanger,
University of Dar Es Salaam Geology Department and University Oslo.
Through these collaborations, Statoil also provides scholarships to Tanzanian
students in areas of oil and gas, exchange programs for University lecturers,
supports field courses, guest lecturing and Training of Trainers programs. In
addition, Statoil donates laboratory equipments and experimental cores to
UDOM and UDSM.
The results of these programs include new bachelors and masters programs in
areas of oil and gas, quality research papers/theses and increased number of
oil and gas professionals. The programs are Master Program of Finance and
Accounting in Oil and Gas (MFA-OG) at UDBS, Master of Petroleum
Geology at UDOM. The number of students benefited from these
scholarships as of September 2016 is 80. Graduates from respective programs
have been employed by Tanzanian universities to sustain the above programs;
while other graduates have been absorbed in both the public and the private
sector locally and abroad.
There are various operational challenges experienced with the university to
university collaboration model, nevertheless it has so far proven to be more
sustainable to build institutional capacity locally as opposed to building
capacity through international scholarships alone. It is hoped that this model
will continue to lay a foundation in capacity building at the tertiary education
level.
38 TOGACE - 2016
38
Gas Policy, Local Content Policy
Paper 12: Gas Policy and Local Content Policy For Their
Implementation
E. Kavana
provision, costs and more. Regulatory Bodies Oil and gas development in a
community may be regulated by state and local law as well as all levels of
government agencies.
40
40 TOGACE - 2016
Regulatory Framework, Strategies and Institutional Arrangements
41 41
TOGACE - 2016
Regulatory Framework, Strategies and Institutional Arrangements
Introduction
Tanzania discovered gas in the year 1974 through the discovery well, Songo
Songo-1, which was drilled in l974 by AGIP, followed by a discovery well
drilled by AGIP, Mnazi Bay-1, in l982 but more deposits discovered in years
2010 after start of off shore exploration3. The earlier years of gas discovery
placed the gas on the least important resource and nothing happened to
process it for about 20 years where the Government decided to use the gas for
power production through Songas Thermal Power Station of 2004 4. During
this time, most of people would not bother on what was happening with gas
because the gas itself was not that important resource and a source of social
economic development. This was because the price of the gas was relatively
less and so not that important. The years from 2010 witnessed more
exploration going offshore where they came up with huge discoveries and
during this time, the product became important and with good price and uses
in the market. This is where peoples interest, institutional interventions and
need of appropriate legal regime and institutional set up became relevant.
With such pressure of every stakeholders attention, transparency becomes an
important tool in managing the pressure of stakeholders interests.
1
Tony Wood (2007)
2
World Bank (2009)
3
http://www.tpdc-tz.com/songosongo.php
4
https://en.wikipedia.org/wiki/List_of_power_stations_in_Tanzania
42 TOGACE - 2016
42
Regulatory Framework, Strategies and Institutional Arrangements
43 43
TOGACE - 2016
Regulatory Framework, Strategies and Institutional Arrangements
Abstract
Statoil was awarded Block 2 in 2007, and in 2010 ExxonMobil farmed in as
Co-venture with 35%. The first 3D seismic data was acquired in 2009
covering the area around the Sea gap strike slip fault and its associated pop
up structures and pull apart basins. 14 wells have been drilled in total in the
block (ten wildcats and four appraisals wells) have been drilled in the block
from 2012 to 2015. During 2013 the 3D data coverage was extended to 6000
km2 including the West side, Davie-Ridge and Sea Gap extension surveys.
The total drilling success rate has been outstanding; eight out of ten wildcat
wells have proven gas, at several stratigraphic levels.
The discoveries in Tanzania Block 2 are located some 100 km offshore
Tanzania at a water depth of approximately 2500 meters.
The resource base of the block will likely be the foundation for a mega gas
development project, including all the development phases from exploration
to production. The full value chain development project will comprise
reservoir extraction through subsea wells and a subsea production system,
pipelines to an onshore LNG plant as a well as subsequent gas distribution to
the domestic and international gas markets. The project will be technically
challenging and demanding, the Contractor Group with Statoil (Operator
65%) and ExxonMobil (partner 35%) is presently preparing technical
solutions for this challenging development.
The presentation will give a description of the potential offshore development
concepts including the Subsea Production Systems and field Layouts for
transportation of the well stream to the LNG plant onshore
44
44 TOGACE - 2016
Regulatory Framework, Strategies and Institutional Arrangements
John G Mgayambasa
Tanzania Petroleum Development Corporation, Benjamini W. Mkapa
Towers, Azikiwe Str., P. O. Box 2774 Dar es Salaam, Tanzania
jmgayambasa@tpdc-tz.com, +255682150994
Abstract
Tanzania has recently passed a new Petroleum Act, 2015 (the Act) which
repeal the Petroleum (Exploration and Production) Act, 1980 (PEPA) and
the Petroleum Act, 2008. The Act, provides a new legal framework and
institutional arrangements in the oil and gas subsector which differs from
the old regime.
The Act provides for the regulation of petroleum activities from upstream
to downstream. The Act introduces two new institutions; the Petroleum
Upstream Regulatory Authority (PURA) and Oil and Gas Advisory
Bureau (OGAB) and reforms the powers and functions of the Ministry of
Energy and Minerals (MEM), Tanzania Petroleum Development
Corporation (TPDC) and Energy and Water Utilities Regulatory Authority
(EWURA). It also designates TPDC as the National Oil Company.
The Act divides the oil and gas legal framework into twelve parts covering
various issues ranging from application of the new legal framework,
powers of Revolutionary Government of Zanzibar in relation to petroleum
located in Zanzibar, institutions involved and regulation of the upstream
and downstream petroleum activities. Other major issues covered by the
Act includes:-health and safety, environmental principles, Government
participation in petroleum affairs, local content, corporate social
responsibility, integrity pledge by oil company and fiscal regime
applicable to petroleum industry.
This paper provides an analysis of the legal framework introduced by this
Act by looking at how various changes introduced in this Act will help to
regulate the petroleum industry in Tanzania. It analyzes the extent to
which the new legal framework differs with the old regime.
45 45
TOGACE - 2016
Regulatory Framework, Strategies and Institutional Arrangements
46
46 TOGACE - 2016
Regulatory Framework, Strategies and Institutional Arrangements
Abstract
47 47
TOGACE - 2016
Utilization of Natural Gas
48
48 TOGACE - 2016
Utilization of Natural Gas
DVC-Academic, UDSM
49 49
TOGACE - 2016
Utilization of Natural Gas
Abstract
This paper presents and discusses various uses of natural gas in Tanzania
with emphasis in power generation now and in the future. In the process it
also looks at how natural gas is used worldwide.
Natural gas is a fossil fuel which is naturally occurring gaseous mixture of
light hydrocarbon, which is found underground in sedimentary rocks. The
main constituents of natural gas are methane, ethane, propane, butanes and
pentanes. Other compounds include carbon dioxide, hydrogen sulphide and
nitrogen and other rare gases. Other fossil fuels include coal and liquid
petroleum (oil).
The origin of natural gas like other fossil fuels has many theories but the
generally accepted one is that the fossil fuels are formed when organic matter
(such as the remains of plants and animals) buried at great depth is
compressed under the earth, at very high pressure and temperature for a long
time.
Normally natural gas is found in areas where oil is also found, and may be
associated (gas from oil reservoirs) or non- associated gas (gas found in gas
reservoirs). The largest gas reserves are found in the Middle East followed by
Europe and Eurasia, Asia and Pacific, Africa, North America, South and
Central America. As of December 31, 2015 total proved gas reserves stood at
6,599.4 trillion cubic ft (186.9 trillion cubic meters).
The main uses of natural gas are:-
(i) Power generation as turbine fuel
(ii) Industrial uses as process heat to replace heavy fuel oil
(iii) Residential and commercial for heating and cooking
(iv) Manufacture of fertilisers (urea and ammonia)
(v) Petrochemical manufacturing as feedstock.
(vi) In transportation as compressed natural gas (CNG)
(vii) Gas to liquid conversion (GTL)
50 TOGACE - 2016
50
Utilization of Natural Gas
In Tanzania natural gas is mainly used for power generation (almost 80%)
and in industries, prison barracks, homes and hotels and as compressed
natural gas for vehicle fuel.
In Tanzania there are onshore and offshore gas discoveries. The onshore
discoveries at Songo Songo (1974) and Mnazi Bay (1982) are already put
into use, Kiliwani production is also starting up but with other discoveries
still to be developed (Mkuranga, Ntorya, and a newer discovery in the Ruvu
basin). The offshore discoveries which forms the bulk of gas reserves in the
country (reserves approximate to 48.7TCF) is currently at development stage.
This paper will discuss in details gas utilization in the power sector in
Tanzania that consumes more than 80% of current gas production in the
country. Gas-based power generation by use of gas turbine or gas engine has
several benefits among them:
(i) It uses natural resource found in the country so saving in generation
fuel cost and foreign exchange
(ii) It is relatively quicker to build and commission compared to
alternative sources.
(iii) It is a clean burning fuel thus protecting the environment.
51
TOGACE - 2016
51
Utilization of Natural Gas
Abstract
Natural gas reserves worldwide are increasing as the rate of new discovery is
greater than the rate of consumption. This increased production has made
natural gas more affordable. From 2004 to 2008, natural gas price averaged
around $7/MMBtu, with a peak of more than $12/MMBtu. Today it is
hovering at around $2/MMBtu whereas crude oil is around $48/bbl. For the
same amount of energy content, natural gas costs one seventh that of crude
oil.
The fast growth of natural gas production is creating a need to develop
technologies for its efficient use which include reduction of amounts of
underutilized gas that is still flared or vented. Enhanced gas conversion into
other uses may play a key role in this respect.
The most efficient use of natural gas is direct conversion to electric power or
use as a fuel for domestic needs, such as cooking. Based on the fact that most
of the urban areas in Tanzania are unplanned, the latter use of natural gas will
take a long time and substantial financial resources to fulfil. With the
anticipated offshore natural gas production in the 2020s, electricity needs and
other industrial energy needs will be met and there will be excess gas.
Besides, 90% of the offshore gas is meant for export to the Far East (China
and Japan) with little value addition (liquefaction). Alternative uses of
natural gas are thus worth thinking about. This calls for production coupled
with use and export of more value added products which are more profitable
than direct combustion of the natural gas to energy/electricity or exporting it
as liquefied natural gas (LNG).
Tanzania has been spending substantial amount of money to import methanol,
ammonia (anhydrous or in aqueous solution), ammonia based fertilizers
(ammonium sulphate and ammonium nitrate) and plastic beads (polyethylene
and polypropylene). All these are natural gas based products. Increased
demand is dictated by increase in population, increase in purchasing power of
the people and growth in industrialisation. Local production of these
chemicals not only will serve some foreign currency required to import such
52 TOGACE - 2016
52
Utilization of Natural Gas
chemicals, but will increase availability and accessibility of the same as well
as creating employment for Tanzanians thus reducing poverty.
This paper provides highlight of the current and future demand for different
natural gas based chemicals in Tanzania and associated costs. In addition, the
paper discusses existing and required policies and legal framework together
with the required skills for implementation and success of the anticipated
industries.
53 TOGACE - 2016
53
Utilization of Natural Gas
Abstract
Natural gas is a vitally important source of energy for all sectors of the
economy. Natural gas is utilized in various areas such as in power generation,
transportation, petrochemical industries, manufacturing industries and
domestic. Utilization of natural gas usually requires investments in gas field
development, gas processing facilities and gas transportation means to end
users. Most of the facilities employed in gas utilization and particularly gas
transportation pipelines are capital intensive and cannot be readily expanded
once the initial
capacity has been established.
The main challenge in the utilization of natural gas is whether gas can be
made available at prices that are affordable to all consumers while
simultaneously assuring profit to the capital- intensive investments in gas
supply. The key target of any gas system is the rapid development of a large
enough market to justify the capital-intensive installations required. This is
particularly true for off-shore gas developments whose costs can be several
hundred percent higher than those of on-shore lines, depending on water
depth, sea bed conditions, and actual locations. Natural gas, if its economic
value is low enough, can serve as a substitute for petroleum products.
54
54 TOGACE - 2016
Utilization of Natural Gas
substitute
Since 2014,forthepetroleum products.
global demand for natural gas has grown by more than half.
This growth is the fastest among the fossil fuels. With the increasing global
Since 2014,
trade in the global
liquefied demand
natural for natural
gas (LNG), gasofhas
the risk growndisruptions
supply by more than half.
has been
This growth
greatly is the fastest
minimized. Among among the that
regions fossil fuels.
push With
global gasthedemand
increasing global
higher are
trade
Far East, with China and Japan being the biggest consumer of natural been
in liquefied natural gas (LNG), the risk of supply disruptions has gas.
greatly minimized.
Despite the higher Among
demandregions that push
of natural gas global gas demand
at global higher gas
level, natural are
Far East, with
production as ofChina
June and
2015Japan
seemedbeing the biggest
to decrease consumer
slightly belowofaverage
naturalingas.
all
Despite the higher demand of natural
regions with the exception of North America. gas at global level, natural gas
production as of June 2015 seemed to decrease slightly below average in all
regions
For the with
casethe
of exception
Tanzania,ofnatural
North America.
gas consumption started in 2004 when
Songo Songo production commenced. The gas produced is utilized in
For the areas
various case ofsuch
Tanzania,
as in natural gas consumption
power generation, started
industries, in 2004
hotels, when
institutions
Songo Songo production
and households. commenced.
In magnitude The gas produced
of consumption, is utilized
power generation is thein
various areas such as in power generation, industries,
leading accounting for about 80% of all natural gas produced annually hotels, institutions
and households.
amounting 35 BCF. In As
magnitude of consumption,
of June 2015, the installed powercapacitygeneration
of the gasisfired
the
leading accounting for about 80% of all natural gas
power plants was 586.5 MW. Industries consume natural gas mainly as a fuel produced annually
amountingindustrial
replacing 35 BCF.diesel
As ofoil June
and2015,
heavythe fuelinstalled capacity
oil for steam of the gas
generation, fired
furnace
power plants
heating etc. Awastotal
586.5ofMW. Industries consume
37 industries are currently natural gas mainly
connected to as
thea fuel
gas
replacing industrial diesel oil and heavy fuel oil for steam
distribution network in Dar es Salaam consuming about 19.8% of all natural generation, furnace
heating etc. Aannually.
gas produced total ofThe37 rest
industries are currently
of natural connected
gas is consumed to the gas
by households
distribution network in Dar es Salaam consuming about
(70), commercial and public institutions (3), fuel for vehicles (60 CNG 19.8% of all natural
cars),
gas produced annually. The rest of natural gas is consumed
which in combination, consumes less than 0.2% of all natural gas produced by households
(70), commercial
annually. Natural and
gas public institutions
utilization in Tanzania(3), fuel for at
is still vehicles
marginal(60level
CNGdue cars),
to,
which in combination, consumes less than
among other factors, lack of adequate infrastructure. 0.2% of all natural gas produced
annually. Natural gas utilization in Tanzania is still at marginal level due to,
among
However, other
in factors,
order tolack of adequate
foster infrastructure.
development and utilization of natural gas in
Tanzania, the Government has put a clear policy, legal and regulatory
However,
frameworkinthatorder to exploration
guides foster development and utilization
and development of natural
and utilization gas in
of natural
Tanzania, the Government
gas. A strategic has put sources
plan that identifies a clear and
policy, legaltoand
projects regulatory
stimulate and
framework that guides exploration and development and utilization
guide investments in natural gas from 2015 - 2045, the Natural Gas of natural
gas. A strategic
Utilization Masterplan
Planthat identifies
(NGUMP) sources
is still underand projects to stimulate and
preparation.
guide investments in natural gas from 2015 - 2045, the Natural Gas
Utilization
This paper Master Plan (NGUMP)
will provide the details is
of still under preparation.
the Natural Gas Utilization Master Plan
(NGUMP) and opportunities arising from its implementation for Tanzanians
This paper will provide the details of the Natural Gas Utilization Master Plan
to participate
(NGUMP) and opportunities arising from its implementation for Tanzanians
to participate
55 TOGACE - 2016
55 55
TOGACE - 2016
Utilization of Natural Gas
Abstract
56
56 TOGACE - 2016
Utilization of Natural Gas
will be a need to monitor and control the activities in the gas sector in order
to mitigate life, economic and, or related loses previously reported by the oil
and gas industry.
HSE principles, liabilities and mandate in the oil and gas industry in
Tanzania, is provided for in sections (VI) and (VII) of the Petroleum Act, No.
21, 2015) the Environmental Management Act (EMA), 2005 and the
Occupation Safety and Health Act (OSHA), 2003 which complement each
other and with the Standards Act (SA) No. 2, 2009. Petroleum Upstream
Regulatory Authority (PURA) and Water and Utilities Regulatory Authority
(EWURA) have respectively been vested with regulatory mandates for the
upstream, midstream and downstream oil and gas sector activities in Tanzania
respectively and the Oil and Gas Advisory Bureau (OGAB) is supportive and
advisory organ while the respective ministries deal with strategic and policy
issues. Within this complex multi-sectorial relationship that has been defined
only very recently, it is necessary and important for stakeholders (internal and
external) to be aware so as to enhance efficiency and effectiveness of their
participation in HSE issues during development, growth and consolidation of
the oil and gas industry
Best practices to address HSE concerns in the oil and gas industry involve
partnership between public regulators and industry, engagement of
labor/stakeholders, support role for research and belief that mutual trust will
prevail and continuously be improved.
57 57
TOGACE - 2016
The World Energy Outlook
58
58 TOGACE - 2016
The World Energy Outlook
Abstract
The paper seeks to outline briefly different generations of PSAs around the
world to demonstrate the context in which the Tanzanian Model Production
Sharing Agreement (MPSA) 2014 should be located. It will also examine the
general thrust of other oil and gas agreements. In addition, an explanation, in
general terms, of what the MPSA 2014 contains will be shown. To achieve
this the following categories of MPSA provisions will be highlighted:
namely, financial and taxation arrangements, cost recovery formulae, profit
sharing mechanism, national equity through the participation of the national
oil company and dispute resolution arrangements. Furthermore, social issues
of health, safety, security and environment (HSSE) will be highlighted as
well as the role of TPDC, the national oil company, in the oil and gas value
chain. A comparative review of other petroleum contracts and agreements
will be conducted. From this analysis a conclusion drawn is that there are
multiple contracts and agreements involved in the petroleum sector and
MPSA 2014 is only a part of broader arrangements in the exploration,
development, transportation and commercialization of petroleum resources in
general.
59 59
TOGACE - 2016
The World Energy Outlook
Ismael Valigy
Abstract
Natural gas (NG) has turned into a vitality energy source around the globe
and Gas to Liquid (GTL) is a refinery process or system that changes NG to
liquid fuels which represents one among three alternatives to monetize it.
With the huge proved reserved of NG in Mozambique, the study aims to
identify the effect on local economy when the country substitutes imported
refined fuel derived from crude oil to local GTL. The production cost of GTL
fuels per barrel of oil equivalent (BOE) was proven less than traditional
refined fuels. Local petroleum law stated, 25% of hydrocarbons explored in
the country will be used in the domestic economy. The results of data
analysis of fuels consumption shows in regression analysis that the amount
spent to import fuels is 15.11% of GDP. Distillate fuel (diesel) represents
67%, gasoline 18% and jet fuel 9%. Was proved and concluded that local
projected GTL fuels production plant with 96.000 of BOE/day and the quote
for using in Mozambique exceed in 167.5% under actual economic factors,
that means an extra of 3.53 million BOE/year for export or reserve. Due to
country policies implications and GTL plant is unfixed also the
recently volatility in crude oil prices, further study may need for better
perception on domestic economy implications of Mozambique.
60
60 TOGACE - 2016
The World Energy Outlook
Abstract
Recent discoveries of natural gas in Tanzania have not only put Tanzania on
the global map of hydrocarbon resource rich countries but it has also
generated some optimism and great hopes of using them for the countrys
socio-economic transformation. While exploration is ongoing and no
companies have yet announced investment decisions, the government has
anticipated future activities by putting in place institutional, policy and legal
frameworks to ensure that there is a stable basis for the development of the
subsector. This has included changes to strengthen the Tanzania Petroleum
Development Corporation (TPDC), a government company overseeing the
development of the oil and gas sector. Several other key policies have been
put in place such as a national Natural Gas Policy, the Tanzania Extractive
Industry (Transparency and Accountability) Act, 2015, the Oil and Gas
Revenue Management Act, 2015, and the Petroleum Act, 2015. In addition,
the natural gas transmission pipeline from Mtwara through Lindi to Dar es
Salaam has been completed. Considerable effort has been made to attract
investors in a number of areas such as cement factories, transport,
construction, and so on.
While these measures are well-intentioned and likely to ensure a vibrant level
of industrial development, it is not clear whether they will be sufficient to
enable Tanzania to avoid the fate that has befallen some other resource rich
African countries, namely the resource curse. Hence it is imperative that
Tanzania finds a way to prevent potential adverse effects from becoming
realities that eventually turn into a resource curse. One key way to achieve
this is through meaningful and active community engagement in resource
governance. In many past instances of the development of energy resources
elsewhere in Africa, especially where oil and natural gas is concerned,
community participation was not very high on the development agenda. To
61 61
TOGACE - 2016
The World Energy Outlook
62
62 TOGACE - 2016
The World Energy Outlook
Abstract
63 63
TOGACE - 2016
The World Energy Outlook
64
64 TOGACE - 2016
The World Energy Outlook
Abstract
This paper describes the proposed metrology infrastructures in suppoting the
implementation of natural gas policy and the national governments
economic plan to achieve competitiveness in the national and international
LNG markets. Tanzania need to undertake improved metrology
infastructures so that to establish complete confidence in LNG measurement,
to ensures the integrity in the calculation of royalty and other taxes to be paid
by concessionaires to the government, fare trade and consumer protection.
The measurement of LNG for trading purpose is regulated and heavily
influenced by the directives, standards and guidance of the legal metrology
community, ISO, and the industrial association GIIGNL (International Group
of Liquefied Gas Importers). Upon this background, it is imperative to have
assessment tool to gauge the need of metrology infrastructures in
development of energy sector in Tanzania.
Consistant and reliable measurement of natural gas is the key issue for
ecomomic development, consumer protection and fair trade. In its turn,
reliable measurement depend upon a national metrology system organized in
such a way that it can provide national measurement standards and
international equivalence of measured values is essential to the desired
reliability.The transfer of LNG from buyer to seller (custody transfer)
involves significant financial risk due to lack of accurate information on
measurement uncertainties in the transferred energy. This translates to
financial risk for both the buyer and seller. For example, clear view on the
total measurement uncertainty for the delivered energy of LNG has been
lacking with estimates ranging between 0.5 - 1.0% and even higher (JPR
Report 2013, V1). This called for efforts to improve national metrology
infrastructure in natural gas sector.
65 65
TOGACE - 2016
The World Energy Outlook
66
66 TOGACE - 2016
The World Energy Outlook
67 67
TOGACE - 2016
The World Energy Outlook
Abstract
The benefits of using compressed natural gas (CNG) as the fuel for city buses
and taxis are presented. The amount of petrol and diesel currently used and
the CNG required to replace the traditional fuels have been determined and
the reduction on the emissions after conversion to CNG established. A
forecasted amount of natural gas demand for the next 50 years have been
established and compared with available proven reserves. Also, adoption of
CNG would save the foreign currency used to import petrol and diesel as
natural gas is available locally.
It was found that the use of petrol and diesel produces approximately Mt 2.0
CO2e (Million tons of Carbon dioxide equivalents) per year; and that if all
Dar es Salaam city buses were converted into CNG the reduction in these
emissions would be approx. Mt 1.0 CO2e per year. It was also found that if all
Dar es Salaam city buses including the new rapid buses were converted into
CNG the reduction in these emissions would be 60% of CO, 40% of CO2,
35% of NOx, 93.5 % of PMs and up to 100% of SO2. The country will save
millions of dollars on foreign exchange. Compressed Natural Gas Vehicle
(CNGV) technology is advantageous and suitable for use in Tanzania
especially for big cities like Dar es Salaam.
Established under the Kyoto Protocol, the Clean Development Mechanism
(CDM) scheme is an incentive for companies in industrialized countries to
invest in eligible emissions reduction projects in developing countries. The
Clean Development Mechanism (CDM) allows a company in industrialized
country to reduce greenhouse gas emissions in a cost-efficient manner. Its
active contribution to sustainable development is awarded with emission
credits that can fulfil its own commitments or be traded on the Greenhouse
Gas (GHG) market and therefore CNG can also be considered as an option.
68
68 TOGACE - 2016
The World Energy Outlook
The study therefore concludes that Tanzania have enough natural gas to
engage in CNG for Dar es Salaam city transport considering proven reserves
and current exploration activities. For a country like Tanzania CNG stands to
be the best option economically and environmentally, with reduction in
production of the harmful exhaust emissions.
69 69
TOGACE - 2016
The World Energy Outlook
Abstract
Tanzania is blessed to have abundant gas resources discovered in several
places including Lindi, Mtwara and Coastal Regions. Due to hard to reach
proximity of discovery areas and the need of high technology as well as
expertizes, gas operations is associated with gathering experts from different
parts of the world in remote areas with limited access of quality healthcare
system. This necessitates the need of dedicated medical facilities to cater for
workers in these isolated operations. The purpose of this study is to describe
injuries and illnesses occurring in these operations so as to enable oil and gas
companies cost-effectively prepare customized medical facilities.
70
70 TOGACE - 2016
Exhibition Layout
71 71
TOGACE - 2016