TPDC AND DANGOTE SIGN DEAL FOR NATURAL GAS SUPPLY

Hope for cement price reduction arises after government agree deal with Dangote.

Tanzania government is making plans to lower cement price the country. The government has seal a 20-year deal for supply of cost effective natural gas. Meanwhile, this gas will help generate electricity at Dangote’s cement plant in Mtwara.

The deals has raise hope as it will increase production and eventually reduce price for cement in the domestic markets. The deal also comes in the awake of  reports that the country is facing an acute shortage of the building material.

According to reports, the factory will produce up to 35 megawatts of electricity from natural gas and later increase to 45 MW. It will also increase its production capacity from 2,000 to 6,000 tonnes per day and reduce production cost.

Tanzania Petroleum Development Corporation (TPDC) acting Managing Director Engineer Kapuulya Musomba said ”Dangote Cement is among seven factories which were lined-up for connection. He said they will connect to the power supply during the 2018/2019 fiscal year.”

The three million tonne capacity factory in Mtwara is the largest cement plant in the country. It also boost about 500 million tonnes of limestone reserves which can meet the demand for the next 149 years.

Dangote Industries Chief Executive Officer (CEO) Jagat Rathee said “High production costs due to reliance on electricity generated from diesel-fired turbines is the major challenge facing the plant.”

The deal will have TPDC supply eight million cubic feet to Dangote in the first phase. Meanwhile in the second phase it will increase to 20 million cubic feet.

The deal will help reduce the price of cement which has seen it raisen to 20-24000 for a 50-kilogramme bag.

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