Gas-rich Tanzania to start power exports in 2015

Sun Aug 25, 2013 11:52am EDT

* Says Kenya has enquired to buy 1,000 megawatts

* Top Chinese firms to bid for country's oil, gas blocks

DAR ES SALAAM Aug 25 (Reuters) - Tanzania, which has made big natural gas discoveries, plans to start power exports to its energy-starved east African neighbours in 2015 after the completion of a gas pipeline.

East Africa's second-biggest economy said the pipeline, funded by a $1.2 billion Chinese loan, would be completed by December 2014 enabling the country to double its power generation capacity to 3,000 MW.

Energy and minerals minister Sospeter Muhongo said Tanzania, which currently imports around 14 megawatts of electricity from its neighbours and suffers from chronic energy shortages, was poised to become a net power exporter within the next two years.

"We are on course to start power exports in 2015 because of the surplus electricity that we will be producing after the completion of the ongoing pipeline construction," Muhongo told reporters late on Saturday after inspecting construction of the 532 km pipeline on the outskirts of Dar es Salaam.

He said Kenya had made enquiries about importing some 1,000 megawatts of electricity from Tanzania.

Tanzania has 43.1 trillion cubic feet of recoverable natural gas reserves and anticipates that will rise fivefold within the next two years if new finds prove productive.

In July the country also revised its coal reserves to 5 billion tonnes from about 1.5 billion tonnes, and said it plans to use coal and gas for power generation.

Muhongo said Chinese firms had recently shown interest in Tanzania's oil and gas sector and were expected to bid for blocks in its October oil and gas exploration bid round.

Tanzania has so far licensed 16 international energy companies to search for oil and gas. British gas firm BG Group , Norway's Statoil, Brazil's Petrobras, Royal Dutch Shell and Exxon Mobil Corp are among companies already operating in Tanzania.