Tanzania: Wentworth Resources Receives First Payment for Mnazi Bay Gas
Wentworth Resources has provided an operational update following first delivery of gas to the pipeline project from its assets near Mnazi Bay, Tanzania.
Gas delivery to the new transnational pipeline has commenced and is being used by the Ubungo-II and Symbian power plants in Dar es Salaam
Production volumes into the pipeline are currently at 33 mmscf/day, and are expected to reach 80 mmscf/day in Q4 2015
An average of 33mmscf/day was delivered to the new pipeline during October 2015 and a gross payment of $3.8 million has been received relating to the October 2015 gas deliveries
Further to the Company’s announcement on 20 August 2015 that gas deliveries to the new transnational pipeline had commenced; the gas production facilities at Madimba, the Mtwara to Dar es Salaam pipeline and the Kinyerezi Gas Receiving Facility have now been fully commissioned and are operational. Mnazi Bay Gas is currently being used to generate power in Dar es Salaam at the existing Ubungo-II and Symbian power plants, as well as at the new Kinyerezi-I power plant. Production volumes into the pipeline are currently at 33 mmscf/day from three wells on a restricted flow basis, and are expected to reach 80 mmscf/day once all of the generators at these three power plants are fully operational, which is expected in Q4 2015. Three of the five existing gas wells at Mnazi Bay have been successfully brought on-stream with well performance in line with expectations. The fourth well is expected to be tied in during the month of November 2015 and the fifth well is expected to be tied in and ready to produce into the new pipeline in Q1 2016.
Sales gas volumes of 1,032 mmscf were delivered to the new pipeline during October 2015 (an average of 33mmscf/day) and a gross payment of $3.8 million to the Mnazi Bay Joint Venture Partners has been received from the buyer of the gas, Tanzania Petroleum Development Corporation (‘TPDC’).
Under the Gas Sales Agreement signed on 12 September 2014, the sale price has been set at US$3.00 per million BTU, approx. US$3.07 per thousand cubic feet, rising in line with the US CPI industrial index commencing in 2016.
Photo below shows production operations at the MB-3 development well site.
Geoff Bury, Managing Director, said ‘We are pleased with the progress that has been made by the Government during the start-up and commissioning phases and we are delighted about how well the new pipeline system is working. We, along with our Joint Venture Partners, feel confident that our existing wells will be capable of delivering the initial target production volumes of 80mmscf/d while we expect the Government owned power plants to be ready to take the full amount of these volumes during the last quarter of 2015.
The Mnazi Bay Concession gas plays a vital role in reducing the cost and improving the reliability of power generation in Tanzania.’