Project Category
Project Category
Oil and gas
Project Description
Project Description
PanAfrican Energy Tanzania Limited ("PAET" or the "Company") is a wholly owned subsidiary of Orca Exploration Group Inc., a TSX Venture Exchange listed company. PAET operates the Songo Songo natural gas field consisting of four producing wells and three suspended wells; a processing plant; and ancillary infrastructure which includes pipelines, a warehouse for materials storage, a fully serviced and catered accommodation camp for operations personnel, a water treatment plant, wastewater and sewage treatment facility, vehicles and small lifting equipment for operational use, and a jetty and roll-on roll-off landing site. The Songo Songo gas field is located onshore and offshore Songo Songo Island, approximately 20 km off the coast of Tanzania and 200 km south of the country`s largest city, Dar es Salaam. The field contains an estimated 1.7 trillion cubic feet (TCF) of original gas in place, and has been on production since 2004. The gas produced from the Songo Songo gas field is processed at a gas processing plant on Songo Songo Island and then transported via a 25 km 12-inch offshore pipeline and a 207 km16-inch onshore pipeline to Dar es Salaam, where the gas is delivered to independent power producer, Songas Limited (Songas), the state power utility, Tanzania Electric Supply Company (TANESCO), and some 38 private industrial companies in Dar es Salaam via a low pressure gas distribution system. Songas owns two of the current producing wells, the gas processing plant at Songo Songo, and the pipeline from Songo Songo to Dar es Salaam, which it also operates. The four operating wells currently produce approximately 92 million standard cubic feet per day (MMscfd) of natural gas. Of this production, up to 45 MMcfd is dedicated to the national oil company, Tanzania Petroleum Development Corporation (TPDC). This portion, which is referred to as "Protected Gas", is produced at no cost, no profit by PAET and sold by TPDC under contract to Songas. Once purchased by Songas, the Protected Gas is mainly used for generation of the bulk of electricity at the 180 MW Ubungo power plant in Dar es Salaam. The electricity produced at Ubungo power plant is sold by Songas to TANESCO. The gas produced by PAET from Songo Songo currently supplies approximately 60% of the power generated in Tanzania. All gas produced in excess of the Protected Gas is termed "Additional Gas". The rights to develop, produce, market and sell Additional Gas is governed by a Production Sharing Agreement between the Government of Tanzania, TPDC and PAET signed in 2001. Additional Gas is currently sold by PAET to (i) Songas, to supply the remainder of the gas used by the Ubungo power plant not covered by Protected Gas; (ii) TANESCO, to supply additional power generation facilities at Ubungo (102MW), Tegeta (45MW) and Symbion (112MW); (iii) the TPCC-owned Wazo Hill Cement Plant, a major industrial consumer; and 37 other smaller industrial customers in Dar es Salaam under stand-alone agreements. The IFC investment will support PAET`s proposed Songo Songo expansion project. The expansion project consists of the work-over of existing suspended production wells, a new development well and associated platform, flow-line to connect the well to the gas processing plant as well as the installation of a process refrigeration unit at the plant. Well work-overs are contemplated to be performed on the two offshore suspended wells, plus one offshore producing well. The well work-over program is scheduled for Q3 2015/Q1 2016. Inasmuch as the work-overs of the suspended wells in particular are considered to be possible, engineering and feasibility studies will be undertaken prior to the work-overs. The workovers, if successful, will use the existing infrastructure (platform and flow-lines). Should the work-overs be deemed unfeasible or prove to be unsuccessful during the workover operation, it is expected that the wells will be either side-tracked or abandoned and new wells drilled to replace the old wells. The surface location for the new well is located just offshore Songo Songo Island, between SS-5 and SS-7. Drilling is currently planned as part of the offshore program for Q4 2015. The offshore program activities, which include the drilling of one new development well and three work-overs of existing producing and suspended wells, are expected to take up to six months including mobilization, drilling operations, well testing and demobilization. Drilling is planned to be done using a shallow draft jack-up or pole barge offshore drilling rig which will be installed by a drilling contractor yet to be identified. The rig will be self-contained in providing accommodation and catering, as well as housing plant and equipment for drilling. All activities involved in the offshore drilling of the new development well will be conducted to good international industry practices and conventional natural gas well drilling scheduling, procedures and practices. Assuming successful and commercially viable, the well will be equipped with a flow-line to the gas processing plant. If for some reason the well is not commercially viable, the well will be abandoned and all materials cleared from the site. After implementation, the project is expected to increase the natural gas production at the Songo Songo gas field from its current level of approximately 92 MMscfd to fill the existing Songas processing and pipeline transportation infrastructure of approximately 102 MMcfd for the
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