By Sarah Townsend
UAE-based conglomerate says made $8 billion to $11 billion natural gas discovery and plans to take to market from 2018
Dubai-based conglomerate Dodsal Group is in talks with banks to raise a further $300 million for gas exploration and production activities in Tanzania.
The group said last year it had made a major natural gas discovery in Tanzania, after having signed an exploration agreement with the Tanzanian government in 2007.
The discovery in the Ruvu Basin, which is around 50 kilometres from the capital Dar es Salaam, is estimated to contain over 2.7 trillion cubic feet (TCF) of natural gas deposits with a value of $8 billion to $11 billion at current market prices, Dodsal said.
The company described it as Tanzania’s biggest onshore gas discovery, claiming it would boost the nation’s total estimated recoverable natural gas reserves to more than 57 TCF. Most of Tanzania’s gas discoveries have so far been made in deep-sea offshore blocks, it added.
In addition, Dodsal announced on Monday that its third well at Mbuyu in Tanzania has found a large gas column estimated to contain up to 5.9 TCF of gas. This is likely to take the total value of the newly discovered deposits to $15 billion – however, Dodsal was reluctant to put a figure on this until a formal valuation has been completed.
At present, studies of the deposits are underway and Dodsal said it expects production in Tanzania to begin in the first quarter of 2018.
The mined gas will initially be solely for domestic use, Dodsal said.
During a press conference on Monday, the group announced plans to invest a total of $500 million in gas exploration and production in Tanzania.
It said it is already pumping $300 million of existing equity into the country over the next 24 months, but was in talks with a range of banks – particularly in London but also in the GCC – to secure an additional $250 million to $300 million of debt financing.
A funding announcement is expected by the middle of this year.
Dr. Rajen Kilachand, chairman and president of Dodsal Group, said: “Tanzania has tremendous potential in the hydrocarbon sector. When efficiently leveraged, this will bring incremental economic growth by assuring timely and ready supply of clean energy.
“We are fully committed to supporting the nation in this journey, underlined by the nine years of natural gas exploration that we have been undertaking.”
The group said Dubai’s central location enables Dodsal Group to act as a link between the clean energy resources in Africa and high-growth markets across the world.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.