Browsing: Energy sector in Tanzania

The wheels of economy would have it that, where there is oil/gas exploration, the multiplier effect is that businesses blossom within and all along the value chain.  

From accommodation that is hotels and guest houses to catering services ranging from high end restaurants for expatriates to Mama Ntilie for the wage workers and everything in between. 

That is the smaller picture, the micro-economics of things, however there are sectors like construction, transportation, electricity and water supply, health and financial services. The list goes on and on, both for small, and medium sized companies, the opportunities available at and around an exploration site are enormous. 

Also read: Oil price drop should nudge Africa towards clean energy

So what aisle local content in Tanzania’s energy sector? In this case let’s focus on the oil and gas sectors and more so the oil sector which is still at the exploration stage.

Demand for affordable and reliable energy is on the rise in Tanzania owing to the fast paced economic growth of the country.

The African Development Bank (AfDB) estimates the demand for energy is growing by 10 per cent every year which the bank says ‘reflects the country’s high economic growth.’

To meet this demand, PanAfrican Energy Tanzania (PAET), the first fully Tanzanian owned company has entered into a long-term Gas Sales Agreement (“GSA”) with the Tanzania Petroleum Development Corporation (“TPDC”).

The agreement provides for the supply of up to 20 million standard cubic feet per day (MMscf/d) of natural gas to the TPDC operated National Natural Gas Infrastructure (“NNGI”) in Songo Songo Island, from where the gas will be processed and transported to Dar es Salaam, primarily for power generation.

This new GSA comes only months after last year’s short-term sales agreement that was also inked with TPDC and TANESCO …