Natural Gas Upstream Hawilti+ 

Orca Energy to execute $21.4m workover programme in Tanzania

PanAfrican Energy Tanzania, the subsidiary of the Orca Energy Group that operates the wells and gas processing plant at Songo Songo in Tanzania, has signed an agreement with Exalo Drilling for the workover of three onshore wells. Activities are set to start in September 2021 on Songo Songo Island.

The 2021 workover programme will notably see the wells recompleted with corrosion resistant chrome tubing while returning two wells to production and ensuring the third well continues to produce safely.

Songo Songo is Tanzania’s flagship gas project and currently supplies about 60% of Tanzania’s gas, mostly used for power generation. While PanAfrican Energy operates the wells and the 110 MMscfd gas processing plant, the Songo Songo development remains owned by Songas, itself majority owned by Globeleq. Only gas produced beyond a threshold of 44.8 MMscfd can be freely marketed and sold by PanAfrican Energy.

Source: Orca Energy Group

The first 45 MMscfd is classified as “Protected Gas” and is owned by the Tanzania Petroleum Development Corp (TPDC) and sold under a 20-year gas agreement expiring on July 31st, 2024. This gas is used by Songas to fuel its 190 MW Ubungo gas-to-power plant but is also used for distribution to the Tanzania Portland Cement Company, and for Tanzania’s village electrification programme. Such distribution is ensured by Songas’ infrastructure which includes the 105 MMscfd, 232km pipeline to Dar es Salam and a 16km spur line to the cement plant.

Beyond 44.8MMscfd, the gas is classified as “Additional Gas” and can be freely commercialized by PanAfrican Energy. The company has been steadily increasing its production and sales of Additional Gas to support additional power generation facilities in Dar es Salam, power several industries and develop a growing Compressed Natural Gas (CNG) business.

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Kenya’s second biggest wind farm starts commercial operations

The 100 MW Kipeto wind farm has officially achieved commercial operations date as of Monday, July 5th. Majority-owned by Actis (88%) via BTE Renewables, Kipeto Energy is Kenya’s second largest wind energy facility after the Lake Turkana one. Kipeto Energy was originally conceived by Kenyan company Craftskills Wind Energy International (CWEIL) with support from General Electric. The $320m project received a boost with the entry of African Infrastructure Investment Managers (AIIM) and IFC InfraVentures in the 2010s. Both entities co-developed the project with Craftskills from 2014 until early 2018, executing a 20-year power purchase agreement (PPA) with Kenya Power and Lighting in 2016. Financial close was successfully achieved with the exit of AIIM and IFC InfraVentures in 2018, whose interests in Kipeto Energy were acquired by Actis. The project is now owned and operated by BTE Renewables (88%), majority-owned by Actis with the rest of the equity in Kipeto Energy Plc still held by CWEIL (12%). Details on the Kipeto Wind Farm are available in the “Projects” section within your Hawilti+ research terminal.

Sahara Tanzania doubles its petroleum products storage capacity

Earlier this year, Sahara Tanzania announced the expansion of its petroleum products storage capacity in the country to 72 million liters. Nigerian energy and power conglomerate Sahara Group has been present in Tanzania since 2015, starting with 10 loading arms and four storage tanks with a combined storage capacity of 36m litres. It has now expanded such infrastructure to 20 loading arms and eight storage tanks. The infrastructure expansion is ine line with the company’s commitment to support products availability in East Africa. Sahara Tanzania is in fact currently involved in expanding storage capacity of automotive gas oil, premium motor spirit and Jet A1. The company has notably committed to build two liquefied petroleum gas (LPG) tanks with a capacity of 6,000 cbm. Sahara Group is one of the largest and most integrated African energy and infrastructure conglomerates with significant business interests across the upstream, midstream, downstream, power generation and logistics & trading industries across the continent and globally. The group started in 1996 as Sahara Energy Resource to trade petroleum products, entering Ghana in 2000, Côte d’Ivoire in 2001, Tanzania in 2015 and Zambia and Guinea-Conakry in 2017. Since 2017, it has consolidated all its petroleum trading, marketing, distribution and storage activities under a single entity, Asharami Synergy.