Tanzania Reach Gas Deal With Dangote

Posted on : Thursday , 23rd November 2017

Dangote cement and Tanzania have come to an agreement on the supply of natural gas to the firm’s manufacturing plant in Tanzania after negotiations stalled over prices.

The 500 million dollars cement factory which is located in Mtwara was set up last year with an annual capacity of three million tonnes, runs on expensive diesel-generators and has sought government-support to reduce costs.

The plant was shut down recently due to high energy costs and erratic power supply by the Tanzania electricity company.

According to the CEO Harpreet Duggal, the company Diesel generators push up their cost of operations.

To cut costs, the company wanted the supply of natural gas.

After meeting the company’s chairman, Aliko Dangote, Magufuli blamed unspecified middlemen for interfering with supply-plans and said the issue has now been resolved with gas-supplies to be sold at a “reasonable” tariff.

Magufuli said, “Dangote Cement will now buy natural gas directly from the state-run TPDC instead of going through middlemen,”

Africa’s-biggest-cement-producer, Dangote has an annual production-capacity of 43.6 million tonnes and targets output of between 74 million and 77 million tonnes by the end of 2019 and 100 million tonnes of capacity by 2020.

The company plans to roll out plants across Africa. In Tanzania, Dangote is seeking to double the country’s annual output of cement to six million tonnes.

Earlier this year the country announced that it had discovered an additional 2.17 trillion cubic-feet (tcf) of possible-natural-gas deposits in an onshore-field, raising its total estimated recoverable-natural-gas reserves to more than 57 tcf

Source : Business News Africa

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