PanAfrican Energy Tanzania is the operator of the Songo Songo gas wells and gas processing plant on behalf of Songas Ltd, the owner of the infrastructure.

The infrastructure includes two gas processing trains each rated at 35 MMscfd (70 MMscfd total); a high pressure 25-kilometre 12″ offshore pipeline and a 207-kilometre 16″ onshore pipeline. Songas operates the high pressure pipeline system.

With demand for gas having increased since production began in 2004, the 70 MMcfd infrastructure limit created a serious bottleneck. To address this issue, Songas initially approved the re-rating of the gas processing plant on Songo Songo Island to 90 MMscfd following certification of the increased rate by Lloyds Register. Then during September 2010 the company undertook further technical analysis and Lloyds Register re-rated the plant to operate at 110 MMcfd. In early 2011 PanAfrican Energy negotiated a Re-rating Agreement with TANESCO and Songas to run the gas processing plant at levels up to 110 MMcfd until the announced Songas Expansion Project is operational. At that time PanAfrican Energy expects to be ready to deliver up to 200 MMcfd.

Songo Songo Development

Planning for the full development of Songo Songo continues with the Company and its partner, TPDC, agreeing on a development plan, the objective of which is to fill the existing infrastructure and the new NNGIP infrastructure when it is available. The plan contemplates working over the existing shut-in Songo Songo wells and drilling a new development well, SS-12, along with the necessary flowlines, inlet compression and inter-connections, to bring total Songo Songo production to approximately 190 MMcfd by 2015. Total capital spending to achieve this plan is estimated to be approximately US$160 million. In order to finance this programme, the Company has engaged a multilateral lending agency to evaluate and potentially fund the project. Proceeding with development will be dependent on agreeing satisfactory commercial terms for a Gas Sales Agreement, including the provision of acceptable payment security for future gas deliveries.