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LPG retail prices to lower with new gas discoveries

7th February 2012
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Retail prices of liquefied petroleum gas (LPG)  derived from natural gas in the country might go  down marginally following announcement of major gas production on Songo Songo Island in Lindi Region.

Already Pan  African Energy Tanzania Limited (PAT) has announced the start of drilling of a new gas production well (“SS-11”) on Songo Songo Island, marking a major milestone in its USD130m investment programme intended to eventually double gas production capacity from the gas field.

According to the company’s general manager Andrew Brown, the Sakson PR5 rig is the most powerful land rig to currently operate in Tanzania and will be drilling a new well as part of PAT’s push to increase gas production capacity from 113 million standard cubic feet per day to well over 200 million in the coming months.

At the moment the price of a cylinder of LPG ranges from 15,000/- to 50,000/- depending on the capacity. It has been reported that many people fail to utilise well LGP due to its increasing prices.

With Tanzania’s power needs growing rapidly in line with the country’s economic development, the company remains committed to playing its part to support the government’s drive for increase energy supply and security, he said.

 

“To start the year with the drilling of the Sakson PR5 rig is exciting and reflects the busy year that we have ahead of us, we are looking forward to continuing to work with our partners to help meet Tanzania’s energy needs as we enter our eleventh year here,” Brown noted. 

 

According to him, the company also plans to drill a USD35m offshore well.

Well SS-11 will be the seventh in the Songo Songo field, which extends both onshore under Songo Songo Island and offshore to the west of the island in Kilwa District, 185km south of Dar es Salaam.

PAT has played a key role with other stakeholders in the development of Tanzania’s gas industry since 2001.

 

The company’s Production Sharing Agreement is in partnership with Tanzania Petroleum Development Corporation (TPDC) and PAT is the operator of the Songo Songo gas processing plant under contract to Songas. 

 

The firm supplies gas primarily for power generation to the Tanzania Electric Supply Company (Tanesco) and Songas, as well as 38 industrial customers.

The use of natural gas particularly for power generation has made a significant contribution to Tanzania’s economy, which is widely recognized to have saved over USD2bn in other fuel costs to the country since commercial operations began in 2004.

SOURCE: THE GUARDIAN
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