Canadian team to tap first Tanzanian production

Tanzanian Pipeline (bytes 16549) TransCanada PipeLines Ltd. and Ocelot Energy Inc. have taken another step in an operation that will thrust Tanzania into the world ranks of hydrocarbon producers. The two Calgary companies signed a letter of intent with the Tanzanian government calling for a $300 million (U.S.) project centered on production from onshore/offshore Songo Songo gas field to provide fuel for power generation and other industrial uses at Dar es Salaam, the nation's capital.

Oct. 30, 1995

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Tanzanian Pipeline (bytes 16549)

TransCanada PipeLines Ltd. and Ocelot Energy Inc. have taken another step in an operation that will thrust Tanzania into the world ranks of hydrocarbon producers.

The two Calgary companies signed a letter of intent with the Tanzanian government calling for a $300 million (U.S.) project centered on production from onshore/offshore Songo Songo gas field to provide fuel for power generation and other industrial uses at Dar es Salaam, the nation's capital. TransCanada and Ocelot will invest $50 million in the project, which they will own and operate for the first 20 years.

The World Bank and European Investment Bank intend to finance the remainder of capital cost. Other financial institutions are considering investing in the project, sponsors said.

Tanzania Petroleum Development Corp. (TPDC) and Tanzania Electric Supply Co. Ltd. (Tanesco), both state owned, will participate in the project.

Tanzania more than 1 year ago accepted a bid from TransCanada and Ocelot to lay a gas pipeline to link Songo Songo with Dar es Salaam (OGJ, Apr. 11, 1994, p. 45).

What's planned

Elements covered by the Oct. 20 letter of agreement are proceeding under plans for a full project agreement and financing during first half 1996. Commercial operations are to begin early in 1998 after:

Construction of facilities for production from three offshore and two onshore gas wells in Songo Songo field.
Construction of a gas processing plant on nearby Songo Songo Island.
Construction of 144 miles of 12 in. pipeline--1512 miles offshore and 1281/2 miles onshore--from Songo Songo Island to Dar es Salaam.
Acquisition and installation of additional gas turbine generators at Dar es Salaam.

Advance work on some aspects of the project is under way.

The TransCanada-Ocelot team, as project manager for Tanesco, is managing construction of two of the three new gas turbine generators at Dar es Salaam approved by the letter of intent. Rated at 75,000 kw, they will jump generating capacity of the Ubungo power plant to 146,000 kw by fourth quarter 1995.

A well servicing and testing program aims to prepare Songo Songo wells for production and confirm and update field capacity data.

TPDC is overseeing acquisition of pipeline right-of-way. The initial gas market will require delivery of as much as 45 MMcfd, with expansion possible to meet further requirements.

George Watson, TransCanada president and chief executive officer, called the project "a good fit" with his company's focus on expanding international operations.