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East African Community Proposes to Build Natural Gas Pipeline

Jan. 21 (Bloomberg) -- The East African Community said it’s discussing the possibility of building a pipeline to carry Tanzania’s natural gas to other members of the bloc.

The proposal would send the fuel north from Tanzania’s commercial hub of Dar es Salaam to Kenya’s port city of Mombasa, the EAC, based in Arusha in northern Tanzania, said in an e-mailed statement yesterday. The group’s other members are Uganda, Rwanda and Burundi.

COWI A/S, a Danish engineering consultant, in July began studying the cost and environmental impact of the proposed pipeline with a $561,700 grant from the Tunis-based African Development Bank, the statement said.

Recent discoveries of natural gas off the coast of Tanzania have taken the country’s total reserves to 7.5 trillion cubic feet, sufficient to allow exports to the region, according to the statement. It didn’t provide more details.

Gas was found at two sites off Tanzania in a drilling program led by Ophir Energy Plc., a U.K.-based oil and gas explorer, in October, Halfani R. Halfani, director of exploration at Tanzania Petroleum Development Corp., said on Dec. 6. The company was due to start drilling a third deep-water well off Tanzania in December in partnership with BG Group Plc.

There are two gas deposits in commercial production in Tanzania. Songo Songo holds 1.5 trillion cubic feet of gas, while the Mnazi Bay field, near the border with Mozambique, has 2 trillion cubic feet, Halfani said.

Tanzanian waters have seen increased oil and gas exploration over the last several years. The Songo Songo West field may contain about 500 billion cubic feet, Peter Clutterbuck, deputy chairman of Orca Exploration Group Inc., said on Nov. 5. Aminex Plc, an Irish oil and natural-gas explorer, said in July 2008 that its Kiliwani-North gas discovery in Tanzania was commercially viable.

Halfani wasn’t reachable for comment in five calls to his mobile phone today.

To contact the reporter on this story: Sarah McGregor in Nairobi at smcgregor5@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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