Natural gas sector achieves notable growth
DAR ES SALAAM: TANZANIA’S natural gas sector has experienced re markable growth, solidifying its role as a vital component of the nation’s energy mix and a key driver of economic development.
The Energy and Water Utilities Regulatory Authority (EWURA) has released generation from gas-fired plants. Natural gas supply reached 81,067.15 million standard cubic feet (MMscf) in 2022/23, reflecting an 11.77 per cent increase from the previous year.
This growth rate, though substantial, was lower than the 33.73 per cent increase observed from 2020/21 to 2022/23.
Government figures re veal a continuing expansion of the natural gas customer base. The number of households connected to the natural gas grid grew from 970 in 2021/22 to 1,514 in 2022/23 with industrial customers ris ing from 52 to 54.
Its regulatory performance report for the 2022/23 finan cial year, which highlights the sector’s progress, chal lenges and future prospects. The report underscores a significant rise in natural gas supply and consump tion, driven by new household connections, industrial growth, an increase in compressed natural gas (CNG) vehicles and greater power.
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The commercial and institutional sectors re mained unchanged, with one customer each and the number of CNG filling stations remained three.
EWURA Direc tor General Dr James Mwainyekule attributed the increase in household connections to govern ment efforts to improve public access to natural gas. The performance of natural gas processing plants was notably strong, with high availability and capacity utilisation rates.
The Tanzania Petroleum Development Corporation (TPDC) Madimba gas processing plant achieved a 100 per cent availability rate, with the M&P gas processing plant at 99.89 per cent. The Songo Songo and Songas processing plants recorded availability rates of 98.07 per cent and 97.87 per cent, respectively.
Despite these high availability rates, over all capacity utilisation remained below 50 per cent, indicating potential for increased production to meet growing demand.
In a significant devel opment, the government has signed a memoran dum of understanding (MoU) with PT ESSA In dustries Indonesia Tbk to establish a 1.3 billion US dollar natural gas-to-urea fertiliser manufacturing plant.
The facility, to be built by TPDC, the Tan zania Fertiliser Regulato ry Authority (TFRA) and the Tanzania Investment Centre (TIC), is set to be located in Mtwara Region and is expected to begin operations in 2029.
Minister in the Presi dent’s Office (Planning and Investment) Prof Kitila Mkumbo has en couraged the investor to expedite construction.
Additionally, Deputy Permanent Secretary in the Ministry of Energy, Dr James Mataragio, an nounced plans to collabo rate with the private sector to develop major natural gas refilling stations, with one station designed to compress three million cubic feet of natural gas per day. This initiative aims to significantly boost both the automotive and industrial sectors.
EWURA’s report highlighted improvements in safety and environmental compliance, with adherence rates rising from 94 to 95 per cent.
The authority empha sised the importance of continued investor compliance with state regula tions. Financially, the sector showed positive trends, with regulated entities’ revenue growing by 20 per cent, while costs increased by only seven per cent, reflecting enhanced efficiency and profitability.
However, the report also noted significant accounts receivable issues, with some entities facing delays in payment collections.
