The company has also developed a sizeable industrial market that includes 36 customers in the Dar es Salaam area. The company is currently marketing compressed natural gas (CNG) to be used in transportation and by industrial and commercial customers who cannot be economically connected to the company’s low pressure gas distribution system.
Power generation capacity has steadily increased over the last few years due to a rebalancing of the power generation mix to include hydro and gas fired generation. Lower than anticipated rain fall has now resulted in hydro generation accounting for less than 50% of the annual available generation. The only major water storage is at the Mtera reservoir which supplies the 80 MW Mtera and 200 MW Kidatu hydro plants. The remaining 261 MWs of hydro generation is “run of river” which is only operational on average for 4-5 months in the year.
There has been steady growth in electricity demand in Tanzania and gas is likely to be the primary source.
Natural gas is a reliable and more environmentally friendly source of energy than heavy fuel oil or coal. In the last period, there has been a steady uptake in the volumes of industrial gas sales.
Demand for cement in Tanzania has also increased significantly over the past few years with extensive construction of new offices and accommodation in Dar es Salaam. A new kiln (Kiln 4) at the Tanzania Portland Cement Company’s Wazo Hill cement plant at Dar es Salaam was commissioned for use with Additional Gas in 2009. Continued growth in demand for cement is forecast to lead to an increase in the gas consumption at Wazo Hill in the near term.
PanAfrican continues to connect additional industrial customers to its low pressure pipeline system that is currently in excess of 50 kilometres. 38 industrial customers are currently connected to the system from diverse industries, including: textile mills, breweries, glass and steel manufacturers.
Looking forward, there is limited opportunity to connect many material new customers and therefore growth in industrial volumes in the short term will primarily be driven by organic growth from within the existing customer base.
COMPRESSED NATURAL GAS (CNG)
PanAfrican has constructed CNG distribution facilities in Dar es Salaam. These include one “Mother Station” consisting of a compressor, a vehicle refuelling dispenser and two trailer filling facilities which fuel vehicles converted to run on CNG. This is a first in East Africa and provides a clean alternative to diesel and gasoline.
Three “Daughter Stations” supply some industries, hotels and one institution. The CNG facilities are intended to supply gas to consumers that cannot be cost-effectively connected to the existing low pressure gas distribution system.