EWURA NARUC PARTENERSHIP Overview of Tanzania Gas Market and Role of EWURA Eng. Poline Msuya Gas Trans. Manager Dar es Salaam 13 th August 2013 1
Contents 1. EWURA Functions 2. Discovweries 3. Existing Gas Infrastructure 4. Gas Market Structure 5. Energy Regulation and Legal Framework 6. EWURA s Role 7. Investment Promotion 8. Conclusion
The Energy and Water Utilities Regulatory Authority (EWURA) 1) A multi-sectoral regulatory body 2) The Act (Chapter 414 of Laws of Tanzania) was enacted in 2001,amended 2003, 2007. 3) The Authority regulates four sectors: Petroleum, Natural Gas, Electricity, and Water.
EWURA Functions 1) Subject to sector legislation:- Issue, renew and cancel licences; Establish standards, terms and conditions; Regulate tariff rates and charges; and Make rules to enable discharge of its duties; 2) Monitor the performance of regulated sectors:- Levels of investment; Security of Supply (quality and quantity); Cost of Services; and Efficiency of Supply Chain.
EWURA Functions cont.. 3) Facilitate the resolution of complains and disputes; 4) Disseminate information on matters relevant to its functions; 5) Consult with other regulatory authorities (in Tanzania and outside); 6) Administer Cap. 414 of Laws of Tanzania; and 7) Perform other relevant functions as are lawfully conferred on the Authority.
Gas Discoveries Discovered Natural Gas Gas Initial In Place (TCF)) Onshore about 7.7 Offshore about 34 Total Natural Gas 41.7
Exploration of Hydrocarbons in Tanzania Songo Songo discovery in 1974 (about 250 km South of Dar es Salaam in 1974), Mnazi Bay in 1982, Mtwara (about 450 km South of Dar es Salaam) Mkuranga (about 60 km South of Dar es Salaam in December 2007) Kiliwani North (about 2.5 km South East of Songo Songo Island in April 2008) Deep Sea in 2010 to date.
LOCATION OF DEEP EXPLORATION WELLS IN TANZANIA
Existing Gas Player Currently there are four key players namely: Tanzania Petroleum Development Corporation (TPDC); Songas (T) Ltd ; Pan African Energy (T) Ltd; and Maurel &Prom -Gas exploration and Production.
Existing infrastructure Songo Songo Gas Field Processing Plant Capacity 70 mmscfd - rerated to 105 mmscfd Transportation: A 25 km 12 diameter offshore line: SS to Somanga Fungu; A 207 km 16 onshore line: Somanga Fungu to Ubungo, DSM; A 16 km 8 diameter lateral line from Ubungo to Wazo Hill cement plants; Maximum capacity of pipeline 105 mmscfd
Existing infrastructure cont.. Mnazi Bay Gas Field Processing Plant Processing plant with maximum Capacity 10 mmscfd 27 km, 8 diameter pipeline from Mnazi Bay to Mtwara Maximum capacity of pipeline 70 mmscfd
Gas Market Structure Natural gas marketing in Tanzania is part of a Production Shearing Agreement (PSA). The Developer of the gas field has a mandate to find the market of a gas as per PSA. The Natural Gas Market in Tanzania is categorized into three major sectors Power Sector Industrial Commercial
Marketing and Sale of natural Gas Songo Songo Gas Field Protected Gas Production and sale of Protected Gas from Songo Songo field: The basic project: Ubungo Power Plan which generates 151 MW (35mmscfd) of electricity using five (5) generators Twiga Cement Factory (Wazo Hill): Uses gas to displace fuel oil burnt in cement kilns. (6mmscfd) The villages electrification project: Generating electricity for villages along the pipeline route. Three generators with a total capacity of about 7.5 MW have been installed (<=1mmscfd)
Marketing of natural Gas Cont Additional Gas Gas in excess of Protected Gas is categorised as Additional Gas Under the PSA, TPDC and PAT have the exclusive right to market and sell natural gas from the Songo Songo field to customers other than those under the Protected Gas category Additional Gas is used for generating power, 42 Industries in DSM and (pilot project of CNG for vehicles and 18 household )
Marketing of natural Gas Cont Mnazi Bay Gas Field: Production started in December 2006 under the Production Sharing Agreement (PSA) between Artumas Group and TPDC Supply to produce power of about 30MW for 20 years to meet the power demand for Mtwara and Lindi regions Plant generating capacity is 18 MW, and it generates about 12 MW consuming about 1.8 mmscfd of natural gas
Natural Gas Based Power Plants Songo Songo Gas Field Installed Capacity Generation Songas Power Plants (UGT 1-6) 191 MW 189 MW TANESCO Ubungo Plant (WATSILA) TANESCO Ubungo Plant (Jacobsen) 102 MW 100MW 100MW 75MW TANESCO Tegeta Plant 45MW 45MW Symbion 112MW - Somanga Fungu Plant 7.5MW 2.5MW TOTAL 557.5MW 411.5MW Mnazi Bay Gas Field TANESCO s Mtwara Plant 18 MW 12 MW
Hydrocarbon discovery, Development, Production and Utilization in Tanzania Power Generation: Songas ~191 MW TANESCO ~220 MW Symbion ~112 MW Industrial customers 42 Industries 2 - non commercial Institutions CNG Customers: 1 - hotel 17 - Households 36 - Vehicles
NEW INFRUSTRUCTURE: Mtwara & Songo Songo Gas Processing Plants and Pipeline to DSM Project Scope: Two expandable processing plants Mtwara 210 mmscfd and Songo Songo 140 mmscfd Pipeline from Mtwara and Songo Songo to DSM of 532 kilometre, 36 inch Diameter with a capacity of 784mmcfd Financing Chinese Exim Bank (soft loan) FEED in progress
National Natural Gas Development Project
Growth in Gas Utilization The demand for power is expected to grow between10% and 15% per annum, which will further contribute to gas demand growth. The market for Compressed Natural Gas has potential for expansion. There is a potential for a petrochemical industry and other industries based on gas as a feedstock.
Regulation and Legal Framework The National Energy Policy, 2003 The Energy and Water Utilities Regulatory Authority Act; The Petroleum (Exploration & Production) Act,1980 Regulations, Rules and Orders; and Licences and Project Specific Agreements
EWURA s Role - Regulatory Issues Perform light-handed Technical Regulation:- Establish codes and standards for goods and services in four sectors; Compliance enforcement of Code of Practices and Standards; and Take into account preservation and protection of the environment. Monitor performance of regulated sectors:- Promote Security of Supply and Security of Demand at all levels (Quality and Quantity); Ensure availability of Third Party Access.
EWURA s Role - Regulatory Issues Subject to the outcome of the new Gas Policy, the downstream gas segment regulation may focus in network tariffs, access rules and monitoring of quality of supply and reliability standards in : Processing Transportation Distribution Storage, and Liquefied Natural Gas
Future Development Natural gas based projects which include Fertilizer and Petrochemical Industries, Gas to Liquids Plants and Liquefaction Plants are essential to realize benefits of natural gas resource Government has plans to initiate Industrial Estates for Natural Gas utilizing Industries for more benefits
Future Outlook Natural Gas Policy, Act and Utilization Master Plan Local Content Policy Issues: Capacity building of Tanzanians Low level of local experts participation due to inadequate skills and experience Maximizing Local consumption by adding value Awareness to general public on Utilization of Natural Gas and benefits
Conclusion Clear regulatory regime in enhancing market efficiency is inevitable to attract investment in infrastructures, without which many projects are difficult to finance. Regulators are necessary for the creation and implementation of a regulatory environment which guarantees the enforcement of the standards technical rules, monitoring unti-competitive behavior, and adequate dispute mechanisms.
THANK YOU