Tanzania buys majority stake in Mtwara plant - The East African

Tanzania buys majority stake in Mtwara plant

Saturday February 11 2012

A gas plant in Tanzania.   Picture: File

A gas plant in Tanzania. Picture: File 


Tanzania and Canadian oil and gas company Wentworth Resource Ltd have reached an agreement over the purchase of the latter’s Mtwara gas power plant.

In the deal, state energy firm Tanzania Electric Supply Company Ltd (Tanesco) will acquire the 18MW gas-fired power plant and associated assets in Tanzania.

Tanesco will buy 100 per cent shares of the power plant at $13.5 million.

Wentworth managing director Geoff Bury said the funds from the acquisitions will allow the firm to streamline its Tanzania operations and focus on exploring for hydrocarbons and developing and producing its known natural gas resources.

“Wentworth is looking forward to continuing to be a reliable, long-term gas supplier to the Mtwara Power Plant and to being a gas supply partner with Tanesco in other parts of Tanzania,” said.

The agreement will see Wentworth and its Mnazi Bay Concession Partners continue to supply natural gas to the Mtwara Power Plant.

The Mtwara Power Plant has been selling electricity to Tanesco in the Mtwara and Lindi regions. It is supplied by natural gas produced, processed and supplied via pipeline from the Mnazi Bay Concession area.

The sale of the Mtwara plant has comes after Wentworth acquired Cove Energy Tanzania Mnazi Bay Ltd for $38.8 million last month.
Cove Energy chief executive John Craven said that this transaction is an important strategic and positive step for Cove.

Mr Craven said that the agreement with Wentworth increases Cove’s share of its core asset, from Area 1 Rovuma Offshore Exploration and Production Concession Contract by removal of the royalty.

“Divesting from its Tanzanian interests allows Cove to focus on its offshore blocks where considerable potential remains from the ongoing exploration and appraisal programmes in both Mozambique and Kenya,” he said.