Wentworth signs sales and purchase agreement for two Tanzania fields

Wentworth Resources has signed a gas sales and purchase agreement (GSA) with Tanzania Petroleum Development Company covering the Mnazi Bay and Msimbati fields.

The deal covers the long-term sale of natural gas from the Mnazi Bay and Msimbati fields in southern Tanzania to the Mtwara to Dar es Salaam pipeline and Madimba central processing facility, which is controlled by the government.

The pipeline, which is currently under construction, is expected to be completed and commissioned in the first quarter of 2015.

As per the deal, the partners on the Mnazi Bay project are contracted to supply up to 80 million cubic feet of gas per day in the initial eight months.

It also includes an option to increase the supply to 130 million cubic feet of gas per day for around 17 years.

The initial delivery is expected to start in the period between 22 January and 22 April 2015 .

The gas will be sold and purchased at the inlet to a 16in pipeline linking the Mnazi Bay gas production facility to the Madimba central processing facility.

Wentworth executive chairman Bob McBean said: "The signing of the Mnazi Bay GSA is a significant advancement in the development of the gas industry and lays the foundation for the future domestic gas development in Tanzania.

"Additionally, this agreement is a major milestone in Wentworth’s gas monetisation strategy to commercialise our discovered gas resources, taking us a step closer to reclassifying our resources to reserves, and is a significant value driver for the company.

"Following the processing and interpretation of recently acquired high-resolution 2D data over the Mnazi Bay and Msimbati gas fields, we plan to commence a development drilling programme with the aim of increasing production up to 130 million cubic feet of gas per day."