Bloomberg News

East African Energy Ministers May Decide on Pipeline by October

June 29, 2011

June 29 (Bloomberg) -- East African energy ministers may decide by October on a proposal to build a natural gas pipeline from Tanzania to Kenya to help meet the region’s rising energy needs, a senior official said.

COWI A/S, a Danish engineering consultant, last week published a study for the East Africa Community outlining four economically viable overland routes for the pipeline, ranging in cost between $515 million and $630 million.

“A petroleum council of ministers is next supposed to meet in October, and they will likely then pick the best option,” Peter Kinuthia, a senior energy officer at the East African Community, said by phone from Arusha, Tanzania today.

The five-nation EAC, comprising Kenya, Tanzania, Uganda, Rwanda and Burundi, is a common market of 126 million people with a combined gross domestic product of $73 billion.

All four routes proposed in the report envisioned the pipeline running about 500 kilometers (310 miles) from Tanzania’s commercial hub of Dar es Salaam through the northern town of Tanga and ending at Kenya’s port city of Mombasa. It could be operational by 2015, and an offshore alternative would be too expensive, the study said.

The region’s governments are seeking to improve energy infrastructure and ensure reliable electricity supplies to cater for economic expansion and population growth.

Tanzania began 12-hour daily power cuts last week after drought reduced water levels in hydropower dams, the Citizen newspaper reported on June 22.

There are two gas deposits in commercial production in Tanzania. Songo Songo holds 1.5 trillion cubic feet of gas, while Mnazi Bay, near the border with Mozambique, has 2 trillion cubic feet, according to the state-run Tanzania Petroleum Development Corp.

Recent discoveries of natural gas off the coast of Tanzania have taken the country’s total reserves to 7.5 trillion cubic feet, enough to allow exports, the EAC said on Jan. 21.

--Editors: Ben Holland, Philip Sanders.

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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