In pursuit of realising significant developments and addressing the challenges in the natural gas industry, the government embarked on developing the policy and legal framework to govern exploration and production, transportation and distribution of natural gas. In November 2012, the Ministry of energy and minerals released a draft natural gas policy for public consultation.
To this end, Policy Forum held a Breakfast Debate on Thursday 24th January, 2013 to discuss the draft gas policy and present were CSO and industry representatives to air their views.
The main presenters of the breakfast talk were by Malcolm Taylor, the Gas Infrastructure Manager of Songas and Amani Mustafa, the Executive Director of Hakimadini.
In his presentation, Taylor, whose company Songas does supplies cheap thermal power and around a third of the country’s power from UPP, said the Policy should do the following to address the citizens’ needs: facilitate informed democratic debate that enables people to participate effectively, address strategic opportunities, encourage inward investment and support a stable, regulatory structure.
On his part, Amani Mustafa presented the CSO's perspective on the draft gas policy. He stressed the government to consider developing a comprehensive petroleum policy incorporating both oil and gas at all stages (i.e. up-mid-downstream since there are missing links between the three ). The draft policy correctly points that natural gas upstream activities shall be addressed extensively by the Petroleum Policy. The implication is that upstream will have to necessarily align with midstream policy, otherwise, should the upstream policy contradict midstream or discourage investment upstream, the risk is that midstream operations could be hampered.
He continued to say that, Government participation should be strategically placed in building infrastructure at both upstream and midstream levels, The role of the government and TPDC should be clarified in mid and downstream operations, Downstream activities should be left to national private sector or combined Public Private Partnerships.
He also said that the state should work to avoid leakages through contract transparency (encourage country-by-country reporting) and reduction in Capital flight. He also stressed the need to protect the environment.
The discussant at the breakfast talk was Dr. Prosper Ngowi, Lecturer of Mzumbe University, who said the fundamental thing is how are we as Tanzania are able to tap the revenues from gas.
Tanzania has been exploring for oil and gas for more than half a century, where the first natural gas discovery was made in Songo Songo Island in 1974 followed by another one in Mnazi Bay in 1982. In 2004 and 2006 commercial production of natural gas both Songo Songo and Mnazi Bay commenced. Since commercialization of the natural gas, Tanzania has witnessed further exploration and discoveries of large quantities of natural gas both onshore and offshore.
Natural gas discoveries of about 8 trillion cubic feet (TCF) have been made from the onshore gas fields at Songo Songo, Mnazi Bay, Mkuranga, Kiliwani North and Ntorya. As of June 2012 natural gas discoveries of about 33TCF (6 billion barrel of oil equivalent-BoE) have been made from both onshore and offshore basins. The deep sea discoveries have indicated a new era in the exploration for petroleum in Tanzania and the region at large. Tanzania looks at these developments as an important platform towards future exploration successes. Inspite of the developments registered, the industry is facing a number of challenges including natural gas infrastructure, natural gas revenue management, policy, institutional and legal frameworks to administer the industry effectively, human resources with the requisite skills and knowledge in the natural gas industry.