Gas Resources and Reserves in Southern and East Africa. Michael de Pontes Pascoal Mocumbi Charles Jimmy Sangweni

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1 Gas Resources and Reserves in Southern and East Africa Michael de Pontes Pascoal Mocumbi Charles Jimmy Sangweni

2 Southern Africa Gas Supply & Infrastructure 2014 Soyo ~38.5 TCF P50 Tanzania ~ 9.5 TCF P90 Palma ~ 0.8 TCF P90 Kudu Ibhubesi CBM ~ 6.1 TCF P10 Waterberg ~ 48.5 TCF (10% of IEA) Mopane Ermelo Amersfoort Pande Temane ~ 4.5 TCF P90 ~ 190 TCF P50 ~ 0.2 TCF P90 = Potential FSRU EM FA ~ 0.2 TCF FO = Potential LNGT Prospective P50 2

3 SADC CBM Demand Node Potential LNGT SADC CBM Potential FSRU 500 km Supply Diameter West Coast Shale Shale South Coast KZN Coast

4 IRP2010 Update: Required Electricity Generation from Gas Turbines in terms of Primary Energy requirement % LF 10% LF 1 TCF NG 1 mtpa LNG MGJ/a

5 MOZAMBIQUE Location: South-Eastern Africa Land area: approximately 800,000 Sq.km Coastline: Approximately 2,700 Km Capital: Maputo ( about 2.6 million people) Population: 23.6 million (201) 70% live in the countryside 30% live in urban area Official Language: Portuguese Independence: 1975

6 ENERGY RESOURCES POTENTIAL Mozambiquehasenormous energy resource potential,which include: Hydropower: -More than MW, -Installedcapacity 2300 MW; Coal: -23 billiontonnes of identifiedpotential, -3 billiontonnes of proven reserves andunder development; Natural Gas: Pande &Temane Gas fields 5TCF of proven reserves and under exploitation since 2004; Rovuma Basin 190 TCF fully studied and proven, with the production expected to start by 2018; A Natural Gas Master Plan for Mozambique is presently being prepared for the government. Preliminary results recommend the following options for the use of gas: LNG for exports, power generation plants, fertilizers (urea), GTL plants, industrial consumption, and domesticconsumption Renewables: solar,wind, hydro, and biomass potential are available throughout the country; a mapping exercise for these resources is underway in Mozambique, which is expected to culminateinthe publicationof arenewable Energy Atlasby theyear end. 6

7 ROVUMA BASIN AND PANDE/TEMANE GAS FIELDS

8 GAS TO POWER GENERATION ExistingGasPowerPlants 105 MW EDM (Temane): 6 MW EDM (Nova Mambone): MW Aggreko (R. Garcia) : 105 MW, about 15% to thenationalmarket EDM (Temane) 6 MW EDM (Nova Mambone) MW ELGAS (Islands) 2 MW RESSANO GARCIA 350 MW Projected GasPowerPlantsby MW Sasol New Energy/EDM (R. Garcia): 175 MW Gigawatt(R. Garcia): 100 MW EDM (Maputo) : 100 MW Expansionof EDM (Temane): 10 MW Kuvaninga(Chocke): 45 MW

9 INSTITUTIONAL AND LEGAL FRAMEWORK OF OIL AND GAS SECTOR UPSTREAM Ministry of Mineral Resources Prospecting, exploration, production and transportation - ENH (NOC) - SASOL - ANADARKO - ENI - STATOIL - PETRONAS Petroleum law (incl LNG) ENH Government carried interest in all concessions (10 to 25%) Downstream Ministry of Energy Importation, production, Distribution, Commercialization of petroleum products and natural gas - PETROMOC - NOC - BP - Total - ENGEN - PESS - PETROGAL - OTHERS Decree 45/2012, 28 December Equal Treatment to all Majors Regulated market Government controls the Pump Price 9 Licence and concession

10 IMPACT OF GAS UTILIZATION ON THE MOZAMBICAN ECONOMY ECONOMIC IMPACT Over US$20 billion LNG development Infrastruture Development development of logisitcs support for the industry 8% economic growth contribution from gas development SOCIO ECONOMIC IMPACT Capacity Building and training of Mozambican Nationals IncreaseEmployment opportunities Poverty reduction Development of Small & Medium Entreprises

11 TANZANIA Tanzania has been intermittently explored for over a period of nearly sixty (60) years from The first natural gas was discovered in 1974 at the SongoSongo island in Kilwa District, and later at MnaziBay in MtwaraRegion in To date total natural gas discovered amounts to 46.5 TCF, 8 TCF Onshore and 38.5 TCF Offshore

12 Natural Gas Discoveries Deep Sea ( ) : 38.5 TCF Mkuranga Kiliwani 2007 (0.2 TCF) 2008 (0.07 TCF) SongoSongo 1974 (2.5 TCF) MnaziBay 1982 (5 TCF) Ntorya 2012 ( TCF) Total onshore = 8 TCF TOTAL GIIP (April 2014): 46.5TCF 5/21/2014

13 Songo SongoGas Resource Potential Reserves q Proven Reserves 880 BCF q GIIP 2.5 TCF 13

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15 5/21/2014 ONGOING EXPLORATION ACTIVITIES

16 BG Blocks

17 New Natural gas infrastructure: Mtwara & Songosongo To Dsm Gas Pipeline Project 100% owned by the Government of Tanzania Will transport natural Gas from Mtwara and Songo Songo DSM Construction of new processing facilities in Songo Songo 140 mmscfd Construction of new processing facilities from 210 mmscfd Construction of a km pipeline from Mtwara to DSM and a 24 25km pipeline from Songo Songo to Somanga Fungu Almost more than 60% has been completed : To be completed in December 2014 The pipeline capacity is 784 mmscfd without compression and 1002 with compression Gas which will be transported in 20 years is 12% of current total discovery

18 Forecasts of investments in the gas industry in Tanzania Several future projects: qupstream: Investments in offshore in 7 blocks and Tanzania Petroleum Development Corporation blocks qmidstream: LNG & pipeline from Dar es Salaam to upcountry qdownstream: Distribution networks in Dar es Salaam, Lindi and Mtwara. qgas utilization Projects: Petrochemical, Fertilizer, Cement, Steel, Power Generation, CNGV, Households/Institutions 5/21/2014

19 Perspectives of gas domestic market and exports Domestic Demand for 25 years from 2015 Export will be done after satisfying domestic demand. Currently, some IOCs have shown interest to develop LNG plants

20 Impact of gas industry expansion on the Tanzanian economy q Reduced costs of power generation through replacement of costly imported liquid fuels with natural gas q Accelerating the economy growth by providing affordable and reliable source of Power generation q More Power generation capacity in Tanzania through Natural gas power generation plants (more than 40% of power supply in Tanzania) q Government ownership to ensure security and reliability of the infrastructure 5/21/2014

21 Benefits of Natural Gas Utilization: On q Production of fertilizer Going Projects q Production of Cement i.e. Dangote (Mtwara) and MEIS (Lindi) Cement Factories q Establishment of LNG facility to cater for export: plan to use natural gas that has been discovered in deep sea q Natural Gas Distribution Network in Lindi and Mtwara q Natural Gas Distribution Network to supply industries, Households and Vehicles in Dar es Salaam q Connection of industries in Dar city and neighboring area q Increase in implementation of natural gas related projects has boosted investments in service sectors such as tourism 5/21/2014

22 KENYA AT A GLANCE Africa Location : East Coast of Africa Capital : Nairobi Government type: Democratic Republic Area: 582,646 sq. km Population: 40million GDP growth rate: 5% (2013) Contributors to GDP: Tourism, Mining Agriculture Fishing Manufacturing Transport Communication 22

23 COMPONENTS OF THE KENYA PETROLEUM INDUSTRY o o o Upstream Sector Discovery wells: Nine(9):Seven (7) Onshore and two (2) offshore. Four (4) sedimentary basins Forty six(46) blocks (41 Licensed) Forty five (45)exploration wells and >80000 KM Seismic Contract is Production Sharing Contract Current Oil exploration companies (contractors) include TULLOW, ENI, AFREN,BG, TOTAL, BP, LUNDIN, ANARDAKO, OPHIR, and FAR e.t.c. Midstream Sector Pipeline network of approx. 1200km operated by Kenya Pipeline Corporation for refined petroleum products Over 1,000,000M 3 Storage capacity for petroleum products Downstream Sector Countrywide retail network of 1200 stations operated by Multinationals (Total, Shell, Oil Libya etc) & smaller Kenyan OMCs Ownership of Retail network - Multinational (73%) National Oil(8%) Independents (19%) 23

24 EXPLORATION ACTIVITY MAP 46 Petroleum Exploration Blocks ( 23 onshore and 23 offshore) (1) Lamu Basin- 31 blocks: -18 offshore -7 onshore -6 off/onshore (2) Mandera Basin- 3 blocks (3) Anza Basin- 4 blocks (4) Tertiary Rift - 8 blocks 24

25 CURRENT STATUS The onset of oil and natural gas discoveries in Kenya was a major turning point. Strong evidence of a working petroleum system. Heightened investor interest and increased exploration activities Identification of additional hydrocarbon leads and prospects ongoing High probability of more discoveries Realization that: Institutional competencies a key challenge. The country has very limited window of time to take the right steps to shape the petroleum sector 25

26 References Pascoal Mocumbi (ENH) : Mozambican Presentation to the International Gas Union(IGU) working committee Algiers, Algeria, 28 April 2014 Charles Jimmy Sangweni : Tanzanian Presentation to the IGU working committee Algiers, Algeria, 28 April 2014 Martin Heya : Kenyan Presentation to the IGU working committee Algiers, Algeria, 28 April 2014