Tanzania's Julius Nyerere hydropower drives down gas output by 32pc

Mini LNG refers to small-scale liquefied natural gas plants, which offer portable, modular, and cost-effective solutions for LNG distribution to various applications.

Data from the Bank of Tanzania (BoT) shows that gas production from the Songo Songo and Mnazi Bay fields dropped by 32.4 percent to 15,326.2 million standard cubic feet (mmscf) in the latest quarter compared to the same period in 2023.

This decline is mainly due to reduced demand for natural gas in power generation as the country transitions towards hydropower.

The BoT’s Consolidated Zonal Economic Performance Report shows that natural gas consumption also decreased by 32.1 percent to 14,694.1 mmscf.

Power-generating plants remain the largest natural gas consumers from deposits in the southern regions, accounting for 78 percent of consumption, followed by industries at 21.5 percent.

“Despite the decline in natural gas consumption for power generation—from 18,524.8 mmscf in 2023 to 11,465.4 mmscf in the past year—the demand has shifted towards industries and vehicles. Industrial consumption rose from 3,064.2 mmscf to 3,162.9 mmscf,” according to the BoT report.

The transport sector also saw increased natural gas adoption, with usage rising by 46 percent, while household consumption increased by 35.3 percent.

TPDC’s production manager, Mr Felix Nanguka, told The Citizen that plans are in place to increase production and consumption to meet the growing demand for natural gas.

“Few industries consume large amounts of natural gas, while others use smaller quantities. However, some investors are showing interest in fertilizer production, which will require substantial amounts of natural gas,” he said.

Mr Nanguka added that TPDC is finalizing discussions with companies to supply natural gas using mini-LNG technologies.

“Transporting natural gas via pipeline is expensive, so if these talks succeed, regions beyond pipeline reach will be able to access gas through these technologies,” he explained.

Furthermore, TPDC is negotiating with Uganda to explore the possibility of supplying gas via another pipeline along the East African Crude Oil Pipeline (EACOP) route.

“The gas business will continue to expand as demand remains strong across various sectors,” he added.

The report also highlighted improvements in domestic electricity generation, driven by the start of operations at new hydroelectric power plants, ongoing rural electrification efforts, and the expansion of economic activities.

Electricity generation grew by 15.9 percent to 3,008 gigawatt hours (GWh) in the latest quarter compared to the same period in 2023, with notable increases in the southeastern, northern, and Lake Zones.

In the southeastern zone, electricity generation surged after the JNHPP began operations.

The northern zone saw improved performance due to increased capacity at the New Pangani Falls and Nyumba ya Mungu dams, driven by rising water levels.

In the Lake Zone, power generation rose following the operationalisation of the Rusumo Falls Hydroelectric Power Plant.

Electricity imports from Uganda and Zambia also increased by 94.5 percent, rising to 67.6 GWh compared to the same quarter in 2023.

Much of the electricity from Uganda was used to meet increased demand from the Kagera Sugar Factory.

In contrast, the Dar es Salaam zone, which accounts for 36.2 percent of total electricity generation, saw a 40.7 percent decrease due to reduced capacity at gas-fired power plants, as the less costly hydro-powered electricity from JNHPP took precedence.

BQ Contractors Limited CEO, Mr John Bura, stated that increased investment in gas exploration is essential to ensure broader access to natural gas for the population.

He said the government should put more effort into promoting the use of natural gas, as doing so would reduce the cost of fuel imports and help preserve foreign currency reserves.

“Massive amounts of our natural gas are still underground in this area; more investment is needed in exploration, connecting a larger number of households, and opening more compressed natural gas (CNG) stations so that many people can use it for their vehicles,” he said.

Mr Bura is among the investors in a CNG station and is currently finalizing a few details before the station begins operations.

Early this year, Deputy Minister of Energy Ms Judith Kapinga told Parliament in Dodoma that the government is constructing three CNG refill stations in Dar es Salaam to ease congestion at existing stations.

“In collaboration with the private sector, several other stations are under construction,” she said.

“Through the Tanzania Petroleum Development Corporation (TPDC), we are procuring mobile stations to ensure the availability of refill services from Dar es Salaam-Morogoro to Dodoma,” she added.

In addition to addressing the shortage of CNG refill stations, encouraging vehicle conversions and expanding natural gas connections for domestic use would significantly boost the utilization of the country's valuable natural resource.