Construction of the Government owned and operated Mtwara to Dar es Salaam pipeline is now 100 per cent complete and the two associated processing facilities are approximately 96 per cent complete, East-Africa focused oil and gas company Wentworth Resources has said.
Construction of the land and marine pipeline was expected to cost $875.7 million, while the processing plants were being built at a cost of $349.6 million, according to Tanzania government figures.
Construction has commenced on tying-in the existing four development wells and installing flow lines in order to supply gas to the new pipeline and two of these wells are now fully tied-in.
The 532 km pipeline and gas processing plants were initially expected to be completed last year. Wentworth Resources said it was informed about completion delays by the state-run energy regulator Tanzania Petroleum Development Corporation (TPDC), but expected the gas pipeline to be fully operational within four months. Delivery of first gas into the pipeline is now expected to take place in July 2015.
Wentworth Managing Director Geoff Bury said “We are very encouraged by the progress of the pipeline infrastructure and all aspects of the gas pipeline project. Whilst completion and commissioning delays will impact the timing and amount of expected cash flow generated in 2015, we see clear, tangible progress towards first gas being delivered into the new pipeline in the summer and look forward to ramping up volumes of gas supply, helped by additional production capacity expected from the MB-4 development well.”
“In light of this delay, we are continuing to work on securing additional debt financing to ensure that we have sufficient funds available to see us through to first cashflow. With the pipeline project nearing completion and a signed long-term gas sales agreement, Wentworth and the Mnazi Bay Partners are well positioned to be the first suppliers of gas into the new pipeline,” he said.
Wentworth signed a gas sales and purchase agreement with TPDC, along with Mnazi Bay license partners Maurel et Prom (together the Mnazi Bay Partners) in September 2014, which covers the long-term sale of natural gas from the Mnazi Bay and Msimbati fields in southern Tanzania to the Mtwara to Dar es Salaam pipeline and Madimba central processing facility.
The project was officially inaugurated in September 2012.