Sunday 20 October 2013

[wanabidii] Gas Boom Could End Soon

Sisty,

So far the proven gas discovery is about 1 trillion cubic meter.

below is an article with more challenges we are facing with our resource

Bigger battle awaits Mozambique, Tanzania in East Africa gas race

Haruyoshi Yamaguchi/Bloomberg News

Mozambique and Tanzania are locked in a race to be first to export gas from East Africa, but a bigger battle awaits as the United States and others gear up for a share of the global gas market.

Liquefied natural gas (LNG) shipments from huge recent discoveries could transform their struggling economies, where average annual incomes languish below $600 and life expectancy is less than 60 years.

As things stand today, natural gas is the fastest-growing fossil fuel and the market is tight, boding well for these would-be sellers.

Yet return on investment for the companies footing the hefty upfront costs will hinge on how fast they can reach market and how much gas is found as new rival LNG exporters come to market at the same time or sooner.

Those include Australia, which is off to a headstart, and a thriving U.S. energy market buoyed by shale gas which is expected to begin exporting gas from 2015.

Russia, the world leader in piped gas, has also set its sights on LNG, aiming to ramp up exports targeting Asia's lucrative markets later this decade.

"Mozambique and Tanzania need to move fast to become major exporters," shipping research group Lloyd's List Intelligence said in a recent report.

"The clock is ticking for both nations, as global shale gas exports threaten to saturate the markets before either has had time to export any gas."

The tasks they face include passing legislation to encourage and safeguard investors, securing investment for costly infrastructure, and allaying concerns about potential corruption.

"To ensure… LNG captures the market window in 2018-20, given the five- to six-year construction timetable for such a large project, it needs to reach financial close during 2013/4," said Simon Ashby-Rudd, head of oil and gas at South Africa's Standard Bank.

The Tanzanian government is expected to launch a new bidding round for gas exploration this month.

However, it has yet to finalise its natural gas policy, and debate rumbles on over how much gas should be sold to foreign investors and what safeguards should be put in place to ensure development of the country's own gas and electricity sector.

Adding to the mix, the government's term ends in 2015, stirring political debate within the ruling party as well as among the opposition over the best approach.

"The government will hesitate to bring it (the gas policy)forward in the current political climate," said political risk consultancy Eurasia Group.

"The opposition will seek a firmer stance on local participation in the sector," it said, adding that even existing agreements could be under threat.

In neighbouring Mozambique, the ruling Mozambique Liberation Front's (FRELIMO) hold on power offers political stability for foreign investors. Which could mean speedier passage of needed regulations.

"Frelimo's dominance remains unchallenged. As such, pending changes to regulatory and fiscal codes for the gas sector in Mozambique are likely to pass through the legislature by year's end and before a new bid round in Q1 2014," Eurasia Group said.

Given their different political and regulatory environments, energy consultancy Wood Mackenzie expects Mozambique to export its first LNG cargo by 2019, while Tanzania will have to wait until 2021.

GAS BOOM COULD END SOON

Britain's BG Group and Ophir Energy have been at the forefront of exploration in Tanzania, and energy majors Exxon Mobil and Statoil have also found gas.

"We think East Africa has a very competitive cost base," said Mike Fisher, Ophir's chief operating officer, but he noted that after 2020 it may become more difficult to clinch good prices for supply deals as increased supply could weaken prices.

Drilling in Tanzania has so far shown reserves of over 1 trillion cubic metres (tcm), twice Europe's annual demand.

In Mozambique, exploration efforts are being spearheaded by Italy's ENI and U.S.-based Andarko Petroleum, with drilling producing results showing reserves of more than 3 tcm.

Reflecting Asia's hunger for gas, Japan's Mitsui, China's National Petroleum Corporation (CNPC), and South Korea's Kogas, have also joined projects.

Many analysts put Mozambique's first LNG exports at around 55 billion cm per year, which would amount to annual revenues of over $30 billion at current spot LNG prices paid in Asia, where Mozambique plans to sell.

That would make Mozambique one of the world's top global LNG exporters, trailing Qatar but competing with new suppliers Australia and the United States.

One factor that could benefit Tanzania is that oil has also been found in Mozambique waters.

"Any commercial oil discovery would pose difficult questions for Mozambique: would LNG remain the priority, or would the focus switch to oil," asked Wood Mackenzie.

WILL IT COME IN TIME?

Despite the huge potential, there are concerns that neither Mozambique nor Tanzania will be able to develop their potential before a glut of other new supplies pulls down prices.

It took Angola 11 years of preparation and $10 billion to launch LNG exports which began this year at a rate of 7 billion cubic metres.

"African gas producers certainly do not represent a risk-free alternative," said Amy Gibbs at political risk insurer Jardine Lloyd Thompson.

The United States is expected to begin exports of LNG in 2015, with Bernstein Research estimating that annual volumes could reach around 70 billion cubic metres by 2020.

By 2016, Australia is expected to be exporting around 85 billion cubic metres of LNG each year to Asia, closing in on top-ranked Qatar's output of 100 billion cubic metres per year.


Sent from my iPhone

On Oct 20, 2013, at 6:08 PM, Sisty Basil <stiba7@gmail.com> wrote:

hello James so far how many cubic meters of the natural gas we have discovered.....


On Sun, Oct 20, 2013 at 5:36 PM, JPM<jmataragio@yahoo.com> wrote:
Why Natural Gas isn't Likely to be Tanzania's Economy Liberator
 
In recent years we have been hearing from the media and politicians about the many benefits of newly discovered natural gas and how it will dramatically transform people's lives and significantly contribute to the national economy.
 
As I write people's lives have been lost following a recent uprising from Mtwara and Lindi, protesting for government's decision to build a pipeline which will transport natural gas to the capital Dar es Salaam.
 
Last month alone we have read a more intensified and personal battle between some prominent bussiness men on one side and the government on the other side, and it is all about who gets a share of this national cake. The struggle and high expectations between citizens on one side and the central government on the other hand is a clear indication that stakes are very high all across the board and nobody wants to be left out of what is at least for now is thought to be an alternative economic liberator after we have messed up the mining contracts.
 
Although expectations for changes are so high, however the truth is that many Tanzanians who are counting on natural gas to resolve their economical worries are "counting their chickens before they are hatched".
 
To be able to understand why I personally think natural gas discovery in Tanzania may end up being just a big disappointment, we need to understand how capital expenditure, marekts and competition will play part.  In this article I will briefly discuss these four factors that are key to understanding prior to making any conclusions as to whether or not the natural gas will be our economical savior. These factors are capital expenditure, markets, and competition.
 
Capital Expenditure (Capex) needed to establish Infrastructure for natural gas distribution
In many ways, natural gas consumption is tied up to other things that are happening in the economy. An economy that is industrializing rapidly will easily be able to consume more natural gas than a decline economy.
 
Natural gas is a fuel that requires a lot of infrastructure in order for anything to happen, as a result, it needs a lot of up-front investment. It also needs changes on the consumption side (requiring further investment) that will allow natural gas to be widely used. Excessive initial capital investment requires initial massive production to pay for huge up -front capital expenditure. Tanzania's economy as it stands is not as strong to support such a massive injection of capital investment to support large consumption of natural gas within a relatively short period.
 
Lack of Domestic and Regional Markets
In order for a country to consume a large proportion of natural gas produced, a considerable initial amount of capital investment is needed. A network of new pipelines has to be built to connect regions, districts and neighboring countries where the gas will be sold and consumed in large amounts. If that happen consumption will grow and boost more production. Homeowners and business may need to purchase gas-fired equipment to raise demand. If it is decided to use natural gas vehicles, there is a need for the new vehicles themselves, plus service stations and people trained to fix the new vehicles.
 
Lack of needed infrastructure will create a dismal market and hence low production. To offset this, natural gas will have to be shipped abroad where larger markets exist.
 
External Market (Europe) 
Lack of infrastructure and capacity to consume more natural gas domestically means that the natural gas will have to be shipped abroad where existing infrastructure supports large consumption of natural gas. If that happens, additional facilities such as storage conversion facility that will convert natural gas into liquefied gas before it is shipped in tankers. Liquification of the natural gas into LNG is usually an expensive and a complicated process.
 
Competition 
The total costs that will be involved in building large storage facilities, turning the natural gas into Liquefied Natural Gas (LNG), and shipping costs will significantly add up to the final price of the natural gas produced in the country. This will make our natural gas less competitive compared to other natural gases produced elsewhere.

James Mataragio
Senior Geoscientist
Minerals and Energy


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Sent from my iPhone

On Oct 20, 2013, at 12:45 PM, Vincent Mhangwa <vmhangwa@gmail.com> wrote:

Oh, jamani kumbe alikuwa bado mdogo kabisa. Bado tulikuwa tunahitaji huduma yake. R.I.P Julius, Uncle J.


2013/10/20 Abdalah Hamis <hamisznz@gmail.com>
Picture
Julius Nyaisanga
Meneja wa Aboud Media, Julius Nyaisanga alias "Super Tall" aka "Uncle J", ameaga dunia.

Taarifa zinasema marehemu Nyaisanga:-
  • Amefariki dunia leo asubuhi katika hospitali ya Mazimbu, Morogoro alikopelekwa jana mchana kwa matibabu.
  • Alikuwa akisumbuliwa na shinikizo la damu na kisukari. 
  • Ameaga dunia katika umri wa miaka 53.
  • Ameacha mjane na watoto watatu.

Hapa wavuti.com na Watanzania walio wengi tunamkumbuka marehemu Uncle J kwa umahiri wake wa utangazaji katika 
redio mbalimbali kama vile RTD (sasa TBC) hasa katika usomaji taarifa ya habari na utangazaji vipindi vya burudani na maarifa kama vile Starehe na BPKahawa ni Mali, DJ Show na Uncle J na Club Raha Leo Show.

Pamoja na kuwa kifo huleta huzuni kwa tunaobaki kwa kuwa hatutamwona wala kumsikia tena tuliyempenda, ni vyema pia kumuenzi kwa kazi zake nzuri. Hebu usikiliza moja ya rekodi zake kwenye pleya iliypoachikwa hapo chini ambapo alikuwa na kawaida ya kufunga kipindi kwa kibwagizo cha "fundi mitambo vituuuuuu ni mimi uncle J Nyaisanga. Adios!"

Pia aliwahi kufanya kazi hiyo  ya utangazaji katika vituo vya Radio One Stereo, na ITV. 

Apumzike pema marehemu Julius Nyaisanga!
Utawakumbuka watangazaji wafuatao kuwa moja ya timu bora, mahiri na maarufu kabisa ya watangazaji waliovutia watu kusikiliza redio: David Wakati, Sarah Dumba, Eda Sanga, Jacob Tesha, Ananilea Nkya, Sango Kipozi, Omar Jongo, Ahmed Jongo, Barnabas Mluge, Idrissa Sadallah, Benjamin Kikomongo "Ben Kiko", Bartholomeo Kombwa "Bart Kombwa", Danstan Tido Mhando, Masoud Masoud, Yusuph Omar Chunda, Bujaga Izengo Kadago, Abisai Steven, Angalieni Mpendu, Titus Philipo, Bakari Msulwa, Michael Katembo, Nazir Mayoka, Abdul Ngalawa, Mohammed Kisengo, Abdallah Mlawa, Hendrick Michael Libuda, Abdallah Idrissa Majura, Mikidadi Mahmoud, Rosemary Mkangara, Wilson Malosha, Damian Msangya, Nswima Ernest, Nathan Rwehabura, Betty Chalamila (Betty Mkwassa), Elisia Isabula, Aloysia Maneno, Albert Msemembo, Abdul Masoud, Chisunga Stephen, Siwatu Luanda, Tumbo Tamimu Risasi, Selemani Mkufya, Salim Mbonde, Christine Chokunegela, Kassim Mikongolo, Salama Mfamao, Zawadi Machibya, Juma Ngondae, Salim Seif Mkamba, Nelly Kedela, Dominic Chilambo, Sekioni Kitojo, Malima Ndelema, Khalid Ponera, Julius Nyaisanga, Ahmed Kipozi, Charles Hillary, Aboubakar Liongo, Paschal Mayala, Penzi Nyamungumi, Sued Mwinyi...

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