RE: Positive - not everything is negative Mick9 Dec 2021 17:50
There is no flaring or methane leakage from the field, which also benefits from relatively new and efficient facilities and technologies. It is a “good operation as it stands, but we want to abate emissions as much as possible and we are also looking at local offsets, which will benefit local communities”, Roe says.
Wentworth has only the Mnazi stake to date, but it is looking at other potential opportunities “predominantly with gas”. The company has a proven track record with gas-to-power schemes, Roe says. Wentworth would also consider renewable energy investments in the long term, with the intention to maintain a lower-carbon portfolio.
The company is focused on Tanzania, as it already has good, established relationships and connections in place, Roe says. But there are wider opportunities in east Africa that the firm will not exclude. And Tanzania’s gas reserves and plans to expand gas-fired capacity could see it become a regional hub for power and/or gas exports someday.
Mnazi’s proximity to the border with Mozambique means security is a concern due to the insurgency in Tanzania’s southern neighbour, which has already significantly affected LNG developments there. Mnazi has been well-protected, and additional security measures are now in place, Roe says. The importance of the gas for Tanzania as a whole means the government is keen to ensure security.
Good governance
Wentworth has “great relationships” in Tanzania, Roe says, emphasising the equity partner status of TPDC. “We work very closely and well”, she notes. Foreign companies must partner with African governments, Roe says, adding that the days when foreign firms could act with impunity are gone.
Wentworth has not experienced any recent receivable issues, nor any Covid-related disruption. Tanzania has reliable and good governance and has a stable administration. And the authorities recognise how fundamental gas-to-power is for the country, Roe adds.
Foreign companies often face issues while attempting to monetise gas successfully in developing countries, particularly if the government caps energy prices or if the general public cannot afford to pay for services. But Tanzania is different. The NNGI pipeline significantly lowered the cost of delivered gas, so TPDC can sell the fuel to state utility Tanesco at a price that still allows it to make a profit.
That resulted in a significant shift in the balance sheet of Tanesco, which was formerly a loss-making entity when solely reliant upon Songo Songo gas and other emergency fuels. And that in turn means Wentworth has not experienced issues over payment.
Wentworth considers gas as integral to the energy transition. And when considering ESG, “it is important to link the environmental and social aspects”, Roe says, emphasising that low-cost and low-carbon power provides a huge benefit to Tanzania. Roe also argues that, for Africa, energy access “must come first” in transition planning.
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