Songo Songo

Location and Geology

The Songo Songo gas field is situated on and offshore Songo Songo Island, approximately 15 kilometers from the Tanzanian mainland and 200 kilometers south of Dar es Salaam, the commercial capital of Tanzania. The field is located in shallow water in the Indian Ocean and is characterized by a large north-south trending structure. The gas is contained in Lower Cretaceous inner shelf sand reservoirs with porosities averaging greater than 20% and net porous intervals up to 155 meters thick.

Discovery and Development

The discovery well, Songo Songo-1, was drilled in 1974 by AGIP, now a subsidiary of Eni SpA. However, the gas was not considered commercially viable at the time. The project gained momentum in the late 1990s and early 2000s with the involvement of various international investors and the Tanzanian government. The construction of the gas processing plant, pipelines, and associated infrastructure was completed in May 2004, with the first gas reaching Dar es Salaam in July 2004.

Ownership and Operation

The Songo Songo gas field is owned by Orca Energy Group Inc. through its subsidiary PanAfrican Energy Tanzania Ltd, which operates the field. The project involves a joint venture company, Songas Ltd, formed by CDC Globeleq (now part of Globeleq), Tanesco, TPDC, and TDFL. CDC Globeleq holds the controlling interest in the project.

Infrastructure

The project includes an offshore gas field, a gas processing plant on Songo Songo Island, and a pipeline network. The gas is transported along a 25-kilometer, 12-inch pipeline from the island to the mainland at Somanga Funga and then via a 207-kilometer, 16-inch pipeline to Ubungo and Wazo Hill in Dar es Salaam. The gas processing plant and pipelines were built and are owned by Songas Ltd.

Production

The project initially started with a daily production of about 12.6 million standard cubic feet per day (Mmscf/d) in 2004, which increased to over 51.2 Mmscf/d by 2007 and reached around 65-70 Mmscf/d by July 2008. The gas plant’s maximum nameplate capacity was upgraded to 90 Mmscf/d by the end of 2008. Currently, the field accounts for approximately 54% of Tanzania’s daily natural gas output, with production expected to continue until the field reaches its economic limit in 2026.

Power Generation and Industrial Use

The primary use of the gas is for power generation at the Ubungo power plant in Dar es Salaam, which was converted from liquid fuel turbines to gas-fired turbines. The plant generates about 190 megawatts (MW) of electricity, which is approximately 45% of Tanzania’s power generation capacity. Additionally, the gas supplies the Tanzania Portland Cement Company, breweries, and other industrial users in the Dar es Salaam area. By 2007, 17 industrial customers were connected via a low-pressure distribution network.

Economic Impact

The Songo Songo project has been instrumental in reducing Tanzania’s dependence on expensive external energy sources, saving the country an estimated $42 million annually. The project has also enabled Tanzania to redirect resources previously used for purchasing electricity. It has contributed significantly to the country’s economic growth by providing cheaper and more reliable electricity, which is crucial for sustainable economic development.

Expansion and Future Developments

There are ongoing expansion projects associated with the Songo Songo field, including the Songo Songo North Development and the Songo Songo Future Development, which are currently in the feed and feasibility stages. These projects aim to further increase the gas production capacity and meet the growing demand for electricity in Tanzania.

Contractors and Financing

Key contractors involved in the project include Larsen & Toubro for the engineering and construction, Exalo Drilling, and Valdel Group. The project was financed through a combination of equity contributions and debt financing, with significant support from multilateral credit financing from the International Development Agency (IDA) and the European Investment Bank (EIB).

In summary, the Songo Songo gas project is a critical energy development for Tanzania, providing significant economic benefits, enhancing energy security, and supporting the country's growth through reliable and affordable electricity generation.