Tanzania: Artumas to Increase Output At Mnazi Bay

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The Citizen (Dar es Salaam)

10 October 2008
Posted to the web 10 October 2008

The Citizen Reporter

The Artumas Group plans to carry out additional gas drilling in the Mnazi Bay fields in Mtwara region in order to meet the government's intentions of commercialising the gas for the country's economic development.

Artumas drills about one million cubic feet of gas per day, while the field carries a three trillion cubic feet gas potential. Only a tiny portion of the drilled gas capacity is consumed by the current gas projects. But the company says it is ready to increase drilling to feed the rest of local demands.

"I wish to re-affirm my company's pledge to the government of Tanzania to carry out additional drilling to ensure sufficient gas to allow all the approved projects to take off as they come on stream after conclusion of negotiations," Steve Mason (pictured), president and chief executive officer (CEO) of Artumas told reporters yesterday in Dar es Salaam

The government wants to use the natural gas from the Mnazi Bay fields as feedstock for a large fertilizer facility as well as fuel for a cement company both to be built in Mtwara.

There are also plans for 300MW electricity generation and transmission to feed the national grid, as well as exporting compressed natural gas (CNG) to Mozambique and Kenya.

"Artumas share President Jakaya Kikwete's vision and that of his government of ensuring value addition to natural resources, which will result not only in establishment of local industries, job creation and increased revenues, but also through exports will help offset Tanzania's trade in-balance and earn much needed foreign exchange," Mason said.

Other approved gas commercialization activities will take advantage of available market opportunities to maximize earnings of the government, TPDC and Artumas shareholders.

About 13 investors have expressed interest to set up a major fertilizer plant in Mtwara using Mnazi Bay gas.

Once the government has selected the appropriate investor out of the 13, this project will entail the development of a commercial scale urea/ammonia fertilizer facility "to answer desperate please from local farmers as well as supply export markets."

"It is our belief that in so doing we can help boost agriculture and grow the sector which although it represents the backbone of the economy has only experienced four per cent growth as was stated in the recent government roundtable forum," Mason said.

The fertilizer facility will also provide a major boost to the agricultural sector and remove fertiliser import subsidies that are placing a huge drain on Tanzania's hard earned foreign exchange.

The establishment of a cement factory is aimed at giving a boost to the growing construction industry, a key indicator of economic growth, by providing readily available and competitive cement. "There cannot be rapid infrastructure development without a vibrant construction industry," the CEO noted.

The government through a task force consisting of the ministries of Trade and Industries, along with Energy and Minerals and the Tanzania Petroleum Development Corporation (TPDC) in collaboration with Artumas is conducting an exercise to identify appropriate developers for both the cement and fertilizer projects that will feed off gas supplied from Mnazi Bay.

The three government priority projects combined with CNG export will together represent a major boost to the economy allowing not only for industrial development but also the creation of significant new employment.

That aspect conforms with the government objective of creating a million new jobs in the five year period from early 2006, and also represents a major new revenue stream resulting in vastly higher earnings in foreign exchange, he added.

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