Orca Exploration secures long term gas sales agreement in Tanzania

Orca Exploration Group Inc. (“Orca” or the “Company“) Orca Exploration Group Inc (TSX-V: ORC.A, ORC.B), provides the following operational update on its current activities in Tanzania, through its subsidiary PanAfrican Energy Tanzania (“PAET”).

PAET has entered into a long-term Gas Sales Agreement (“GSA”) with the Tanzania Petroleum Development Corporation (“TPDC”). The GSA provides for the supply of up to 20 million standard cubic feet per day (“MMscfd”) of natural gas to the TPDC operated National Natural Gas Infrastructure (“NNGI”) on Songo Songo Island, where the gas will be processed and transported to Dar es Salaam, primarily for power generation.

Sales of gas under the milestone GSA will replace 20 MMscfd of the 35 MMscfd recently sold by PAET under the short-term sales agreement established with TPDC and TANESCO in December 2018. The balance of 15 MMscfd sold by PAET under the short-term agreement will continue to be supplied through the NNGI alongside the 20 MMscfd sold under the GSA, until completion of the installation of refrigeration on the Songas processing plant by the middle of the year. On completion of the refrigeration project, the 15 MMscfd will revert to be sold by PAET to TANESCO through the Songas processing facility and the short-term agreement will conclude. There is scope within the GSA for the parties to agree an increase in the supply volumes to meet increases in demand on a long-term basis.

Under the short-term agreement PAET achieved average Additional Gas sales of 61 MMscfd through the first quarter of 2019, compared to an average of 40 MMscfd for 2018. With spare productive capacity, PAET is ready to increase supply to help meet expected increases in demand as TANESCO expands its power generation capacity and TPDC continues to develop its downstream business. Under the GSA, gas will be supplied initially through PAET’s SS-12 well, drilled in 2016 as part of a wider development of the Songo Songo field. The Company is in the final stages of installing refrigeration on the Songas processing facility as part of an overall package that will eventually include compression to sustain gas availability.

Nigel Friend, Chief Executive Officer of Orca Exploration commented: 
“The signing of this GSA is a landmark moment for Orca, and our subsidiary PanAfrican Energy Tanzania. The agreement ensures that we will play an important role in helping Tanzania meet its long-term energy requirements, as the country continues to develop in to one of the largest economies in Africa. This event is an important step for the Company, as we look to build on our portfolio and become a major energy supplier in Africa. We look forward to delivering on increasing energy demands in country, and we thank our partners in Tanzania for their continued support and cooperation.”

Andrew Hanna, Managing Director of PAET commented: 
“Through foresight, flexibility and cooperation, PAET is today in prime position to meet immediate and near-term future energy needs of Tanzania. The degree of effort by all parties that has gone in to establishing this GSA cannot be underestimated. It demonstrates what can be achieved here in Tanzania when we work together in a transparent and helpful way. We believe that this agreement once again places PAET in a position where we can support Tanzania in continuing to achieve its enormous potential.”

 

Source: Orca Exploration

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