Maurel & Prom Inks Tanzania Gas Sales Deal

Paris listed Maurel & Prom on Monday announced signing of deal to supply gas from the Mnazi Bay and Msimbati fields in southern Tanzania to the government owned and operated Mtwara to Dar es Salaam pipeline and Madimba central processing facility.

The company signed a gas sales and purchase agreement with TPDC, a partner in the licence, for the long-term sale of natural gas.

The government owned pipeline project is currently under construction and scheduled for completion and commissioning in first quarter of 2015.

Pursuant to the deal, the Mnazi Bay partners are contracted to supply to the pipeline project up to a maximum 80 mmcf/day of natural gas during the first eight months with the option to increase over time to a maximum 130 mmcf/day of natural gas for up to 17-year supply period, Maurel & Prom said in a statement.

The initial delivery is expected to begin during the period 22 January 2015 and 22 April 2015 and be at a fixed price of $3.00 per mmbtu (approximately $3.07 per mcf) escalating with United States CPI Industrial index.

“With a long-term contract in place, the Mnazi Bay partners will use the time before the commencement of first gas delivery to construct and commission the necessary surface infrastructure,” the company said.

Gas will be produced from the existing four wells in the Mnazi Bay and Msimbati fields and these wells are expected to be capable of producing natural gas sufficient to meet the initial 80 mmcf/day delivery volumes under the Mnazi Bay GSA.

Maurel & Prom is operator and holds a 48.06% participation interest in production operations and 60.075% participation interest in exploration operations. The remaining participating interest in production operations are held by Wentworth Resources with 31.94% and TPDC with 20%.