DAR ES SALAAM: Tanzania and
Nigeria's Dangote Cement have reached a deal on the supply of natural gas to
the firm's manufacturing plant in the East African country after negotiations
stalled over prices, Tanzanian President John Magufuli said on Saturday.
The $500 million cement
factory in the southeastern Tanzanian town of Mtwara, set up last year with an
annual capacity of 3 million tonnes, runs on expensive diesel generators and
has sought government support to reduce costs.
But the negotiations had
stalled with the state-run Tanzania Petroleum Development Corporation (TPDC)
saying the company was seeking "at-the-well prices".
After meeting Aliko Dangote,
the company's chairman who is Africa's richest man, Magufuli blamed unspecified
middlemen of interfering with supply plans and said the issue has now been
resolved with gas supplies to be sold at a "reasonable" tariff.
"They (Dangote Cement)
will now buy natural gas directly from the state-run TPDC instead of going
through middlemen," Magufuli told journalists after the meeting.
He did not give details on
the new tariff.
Dangote, Africa's biggest
cement producer, has an annual production capacity of 43.6 million tonnes and
targets output of between 74 million and 77 million tonnes by the end of 2019
and 100 million tonnes of capacity by 2020.
The company plans to roll out
plants across Africa. In Tanzania, Dangote is seeking to double the country's
annual output of cement to 6 million tonnes.
The country announced in
February that it had discovered an additional 2.17 trillion cubic feet (tcf) of
possible natural gas deposits in an onshore field, raising its total estimated
recoverable natural gas reserves to more than 57 tcf.
REUTERS
REUTERS
