* Gas-rich Tanzania plans royalty hike, signature bonus
* E.African country becoming energy hub
* To introduce new legislation by next year
By Fumbuka Ng'wanakilala
DODOMA, Tanzania, July 27 Tanzania plans to
raise royalties on gas and demand signature bonuses for energy
contracts as the east African nation tries to secure bigger
benefits from major offshore discoveries.
Tanzania recently tripled its estimated gas reserves and is
fast becoming a regional energy hub after finds by Norwegian oil
company Statoil, U.S. group ExxonMobil and
Britain's BG Group and its partner Ophir Energy.
Energy and Minerals Minister Sospeter Muhongo said royalties
on gas production would rise from 12.5 percent to an unspecified
level and the new signing fee would be introduced under a new
gas policy, masterplan and law now being drafted.
In a presentation to parliament, he said it would take
effect in 2012/13.
Tanzania is one of the world's poorest countries. Like its
east African neighbours, it is now positioning itself for a gas
Last month, it raised its estimate of recoverable natural
gas reserves to 28.74 trillion cubic feet (tcf) from 10
Muhongo said Tanzania would launch a new licensing round in
Houston, Texas, in September for additional oil and gas
exploration blocks in its deep-sea area.
"The government will review existing contracts and conduct a
detailed evaluation before entering into new production sharing
agreements for oil and gas to ensure national interests are
upheld," he said.
He said at least 18 global energy companies had spent nearly
$920 million on oil and gas exploration.
As part of its plan to get more from its gas, Muhongo said
Tanzania would own a new gas pipeline and processing plants.
Construction started last week on a 532-km (330 mile) pipeline
financed with a $1.2 billion Chinese loan.
The minister said Tanzania hopes to build two gas-powered
plants to produce 390 megawatts of power at a combined cost of
$598 million - reducing its reliance on hydro electric power
which has proved vulnerable to drought.
Loan agreements would be reached in September with the Japan
Bank of International Cooperation and South Africa's Absa Bank
for construction of one of the plants, meant to produce
240MW, he said.
Forty percent of Tanzania's 1,375 MW capacity came from
natural gas by the end of June compared to 1,014 MW a year
earlier. Peak demand rose to 820 MW from 730 MW.