Tanzania: Use of natural gas can boost economic growth

Posted by khethiwe qotyana on 23 March 2018, 11:45 SAST

The use of domestically produced natural gas in Tanzania between 2015 to 2017 has resulted in a Sh8 trillion ($4 billion) economic savings.

Researcher Aristides Katto at the Tanzania Petroleum Development Corporation (TPDC) underlined that the use of locally-produced natural gas has not only saved funds, it has also increased the country's energy sources, and stimulated economic activities.

The country reduced its dependence on heavy furnace oil (HFO), diesel, petrol, jet fuel and other fuels in operating machineries.

Katto noted that Tanzania saved $6.7 billion in 2015 alone, after turning away from HFO and diesel to natural gas to generate electricity. Read more: Tanzania prepares master plan to extend natural gas supplies

It is reported that industries, which decided to use natural gas as a source of energy, saved about $653.48 million as a result in 2015, while other institutions that had also switched to using natural gas made savings amounting to $278,455 in the same year.

These savings are ample testimony to how the use of natural gas can boost economic growth for the country, Katto said, adding that “the figures also show that gas can promote the growth of other sectors of the economy".

"As a country gearing up for industrialisation, Tanzania should bank on natural gas as one of the basic ingredients to making the industrialisation drive a success," he added.

According to TPDC records, demand for natural gas has doubled from a total of 145 million standard cubic feet (mcf) per day in 2016 to 300mcf last year.

Last year, TPDC announced plans to draft a master plan for setting up infrastructure to supply natural gas to industries and households in selected regions.

Tanzania has 57 trillion cubic feet (tcf) of proven but largely undeveloped natural gas reserves, and expects to reap close to $5 billion annually in gas exports revenue through the proposed liquefied natural gas (LNG) plant.

TPDC acting managing director, Kapuulya Musomba, noted: "At the moment, gas supply is ahead of demand. But, we are working to meet the needs as per the industrialisation plan."

He said TPDC is currently carrying out a study to map out gas demands across the country.

So far, at least 42 industries have been connected to the natural gas supply system - although only 37 are fully using this energy source.

Also, two non-industry institutions are using natural gas at the moment, while 70 houses have already been connected to the natural gas pipeline, which runs from Ubungo to Mikocheni in Kinondoni District, Dar es Salaam.

https://www.esi-africa.com/tanzania-use-of-natural-gas-can-boost-economic-growth/