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Natural Gas Network Could Secure EAC Energy Security

•The KE-TZ gas pipeline project has the potential to place the EAC at par with West Africa which benefits from an extensive 678 kilometre gas pipeline •This will largely benefit the region by reducing its vulnerability to global price volatilities as is the norm of the global oil and gas industry

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by KAREN KANDIE

News23 March 2022 - 15:36
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In Summary


•The KE-TZ gas pipeline project has the potential to place the EAC at par with West Africa which benefits from an extensive 678 kilometre gas pipeline

•This will largely benefit the region by reducing its vulnerability to global price volatilities as is the norm of the global oil and gas industry

It is trite that a key ingredient for the achievement of the East African Community’s (EAC) economic ambitions is energy security. Energy security, defined as the uninterrupted availability of energy at an affordable price, is often heralded as the lifeblood of a modern economy to the extent that it has a direct impact on almost all forms of economic activities from manufacturing, agriculture, transportation to service delivery.

To this end, the joint construction of a natural gas pipeline between Dar es Salaam and Mombasa, comprising the first step toward the attainment of a regional natural gas network within EAC, is welcome.

The 558 kilometre pipeline would enable the evacuation of natural gas from Tanzania’s significant gas fields to the Kenyan market for utilisation in power generation, heavy industries, transportation and ultimately, domestic use. It would be the first regional gas pipeline in East Africa and is expected to meet a projected natural gas demand of 150 MMscfd by 2035.

The pipeline, which carries an estimated cost of approximately USD 1.1 billion, is expected to return economic dividends to the two EAC states through increased energy access. The KE-TZ gas pipeline project has the potential to place the EAC at par with  West Africa which benefits from an extensive 678 kilometre gas pipeline network that spans Nigeria, Ghana, Benin and Togo. Upon completion of the project, natural gas evacuated to the Kenyan market would supplement Kenya’s energy mix of hydropower, refined crude, coal, geothermal, wind and solar. This would also enable the generation of clean energy in Kenya where ageing refined crude and coal power plants are replaced by modern gas-based power plants.

From an economic standpoint, while natural gas is historically cheaper than other traditional fossil fuels, the required pipeline infrastructure may negate any cost savings occasioned. Capital costs incurred in the construction of the pipeline would be factored in arriving at the ultimate cost borne by consumers with respect to electricity generation. The above notwithstanding, it is expected that over the life of the pipeline costs associated with natural gas access will be lower than those evidenced from other traditional fuel sources. Similarly, natural gas in the energy mix will complement renewable energy sources by providing base power should intermittency issues arise.

In the long run, the development of a natural gas pipeline network, together with Liquified Petroleum Gas (LPG)  and Liquified Natural Gas (LNG) refining facilities in Tanzania and the availability of crude oil in Kenya and Uganda, would serve to reduce the EAC’s reliance on imported refined crude, LNG and LPG. This will largely benefit the region by reducing its vulnerability to global price volatilities as is the norm of the global oil and gas industry.

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