In an operational update released on January 28, PAET says the planned investment was informed by its expectation of higher demand for gas this year and beyond.  Driving the demand should be the anticipated completion of another unit at Kinyerezi power plant in the third quarter of this year and a new 185-MW combined cycle generation facility likely to be commissioned by December.  There is also potential demand from the country's expanding network of compressed natural gas stations for transport. 

Managing director Andy Hanna said PAET will invest in compression, work-overs and flow-line de-bottle-necking to sustain production and meet the projected demand up to October 2026.

"The company plans to carry out a number of challenging technical projects to meet demand and increase access to the benefits that Tanzania's indigenous natural gas resources bring to the nation," he said.

PAET, a subsidiary of Canada-based Orca Exploration, operates an offshore gas field at Songo Songo under a production sharing agreement with the Tanzania Petroleum Development Corporation (TDPC).

About $1.3mn will be spent on the flow-line debottlenecking project that will begin this month, he said. In total, the work to boost compression will cost $38mn, $34.2mn of which is forecast to be spent this year.  The remainder will be utilised next year when the work is billed to end.

In addition, PAET is evaluating options to work over three onshore wells on Songo Songo Island this year at an estimated cost of $13.1mn. One of the wells is producing but two are shut in. Working the two over will increase output. However, the timing and full scope of the work-overs is subject to board approval and endorsement from Songas, which processes and transports gas by pipe for power generation.   

Demand for gas was strong in 2019, said PAET, consistent with the central bank's recent statement that the east African nation's gas output rose to 60.3mn ft³ in the June 2018/May 2019 period, up from 54mn ft³ in the previous year due to rising demand for electricity generation.  PAET forecasts the trend will continue in that way this year and in the coming years.

The company supplied an annual average of 63.1mn ft³/d of gas last year, a huge jump from 39.9mn ft³/d in 2018. TPDC bought some 9.2bn ft³ of the output which it in turn used to generate electricity or sold to industry.