- New wells to be drilled at Mnazi Bay starting November 2025.
- The last time the country drilled gas well was about 10 years ago.
- Investment comes even as Europe looks set to reduce gas dependency in the backdrop of energy crisis.
Natural gas continue to be a priority area of investment for the Tanzanian government as the country looks to diversify its energy sources and go green. The affirmation was made by the Petroleum Upstream Regulatory Authority (PURA) which is currently undertaking various measures to increase output and distribution of natural gas.
Speaking at the ongoing Public Service Week exhibitions taking place in the capital Dodoma, the Head of the Local Content and Stakeholders Engagement Unit at the authority, Mr. Charles Nyangi said; “The Petroleum Act of 2015 mandates PURA to advise the Minister responsible for petroleum affairs on various matters, including promoting oil and natural gas exploration blocks.
“PURA continues to implement this core responsibility, to attract investment in oil and natural gas exploration,” he said while calling on investors saying the government welcomes new explorations for both oil and natural gas based on the success of gas production at the Mnazi Bay block in Mtwara Region and Songo Songo in Lindi Region.
In this regard the official announced that Maurel et Prom Tanzania, the operator of the Mnazi Bay block, is preparing to drill three new wells. “These wells are expected to increase natural gas production by more than 30 million cubic feet per day,” he said.
In conducting its mandate, PURA oversees the sustainable production of natural gas and requires block operators to rehabilitate wells, drill new production wells, and conduct regular inspections of gas production infrastructure.
PURA is also overseeing preparations for the drilling of gas wells in the Ntorya Discovery Area in Mtwara Region, where between 60 to 140 million cubic feet of natural gas are expected to be produced on a daily basis.
Furtherstill, at least three other natural gas wells are to be drilled in the Mnazi Bay Block in Mtwara Region. Notably, it has been ten (10) years since the last well was drilled in that block, the official said. The drilling of the said wells, scheduled to begin in November 2025, aims to increase natural gas production from the Mnazi Bay Block by more than 30 million cubic feet per day, he went on to detail.
Currently, the Mnazi Bay Block has a total of five (5) wells that produce natural gas at an average rate of 90 to 100 million cubic feet per day. The expected increase in natural gas production will enable greater availability of gas for various uses, including electricity generation, industrial applications, household use, and fueling vehicles,” he added.
Nyangi, who is also Director General of the Petroleum Upstream Regulatory Authority (PURA), said; “As mentioned, the last well in the Mnazi Bay Block was drilled in 2015. Ten years later, a new chapter is about to be written with the drilling of new wells.”
He commended the Sixth Phase Government under the leadership of Her Excellency Dr. Samia Suluhu Hassan for what he described as “…the effective implementation of and commitment to ensuring continued growth and expansion of the oil and gas sub-sector.”
He also pointed out that last year, the government, through the Tanzania Petroleum Development Corporation (TPDC), increased its stake in the Mnazi Bay Block from 20 percent to 40 percent effectively ensuring its decision-making power and participation at the block are secured.
He reassured stakeholders that the government is prioritizing local content in the sector to ensure that Tanzanians and local service providers fully participate in the project. PURA’s main responsibilities is to ensure that Tanzanians have a stake in oil and natural gas exploration, development, and production.
“PURA has been closely monitoring every step of this project’s implementation to ensure Tanzanians have the opportunity to participate,” the Head of the Local Content and Stakeholders Engagement Unit reassured the public.
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Natural gas: Global trends
Notably, since late 2021, reductions in Russian pipeline gas flows to Europe have resulted in supply-demand uncertainty and price volatility. As a result, Europe is shaping global gas markets, with European hub prices setting global LNG spot prices.
According to a recent survey report, “The region (Europe) has responded to the crisis with a significant increase in LNG regasification capacity and some long-term contracting activity, but these interventions have not been sufficient to close the uncontracted gap. There remains substantial uncertainty as to how the European gas market will develop and how it may further impact global markets.”
Titled ‘How gas buyers’ needs will shape the market’ the report follows a survey of more than 70 European gas buyers to gauge their responses. “The survey results reveal respondents’ expectations of future gas demand, commitments to decarbonization, preferred future partners, and risk exposure and management,” reads the report.
Since the start of the current energy crisis, the report says, Europe’s industrial gas demand has decreased, and demand is set to drop even further. According to the report, as Europe faces increased prices and insecure supply, two-thirds of surveyed gas buyers say they have reduced their gas usage since the start of the crisis.
“In its immediate aftermath, buyers increased their energy efficiencies through a combination of efficiency measures (such as waste heat recovery, self-production, and electrification) but also reduced production to lower gas demand particularly in heavier industries,” the report reveals.
It further notes that; “Buyers across Europe expect this decline to continue and even intensify. More than three-quarters of buyers expect to reduce their gas usage over the next few years. Around half of the buyers surveyed expect to reduce their gas usage by less than 10 percent in the next two years while around 40 percent expect to reduce by more than 10 percent (on average, by 25 percent) over the next five years”
It also points out that demand reduction will be driven largely by increased energy efficiency, followed by fuel switching. “Both heavy and light industries expect to implement energy-efficiency measures to make them more resilient to future shocks. Gas-intensive industries anticipate reduced downstream demand for their products, and consequently declining gas demand,” it projects.
“Some parts of the European energy market have responded to tight market conditions and high prices by turning to coal in the short term,” the report shows.
It further notes that more than 90 percent of survey respondents aim to have a quarter of their energy portfolio reach net zero by 2030 and half by 2040.
Despite these ambitious goals, fewer than 10 percent of buyers have fully defined and carried out measures to deliver their decarbonization targets, the report reveals.
According to the report, for many buyers, the energy crisis may have forced a pause in plans as they scrambled to ensure their gas supply was uninterrupted. It syas around 70 percent of buyers see potential for greater energy efficiency, 52 percent are planning to electrify, and in the longer term, three in ten buyers intend to utilize carbon capture, with the time frame for implementation being upwards of three to five years.
