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Dangote Cement haggle over price of natural gas

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Reuters is reporting that Tanzania is in talks with Nigeria's Dangote Cement on the supply of natural gas to a manufacturing plant. Negotiations however are currently held up over prices.

The US$500 million cement factory in the Tanzanian town of Mtwara, established last year with an annual capacity of 3 million t, runs on diesel generators and has sought government support to reduce costs.

State-run Tanzania Petroleum Development Corporation (TPDC) announced that talks were expected to conclude in January, with price disagreements yet to be resolved.

Tanzania announced in February it had discovered an additional 2.17 trillion ft3 of possible natural gas deposits in an onshore field, raising its total estimated recoverable natural gas reserves to more than 57 trillion ft3.

Dangote has an annual production capacity of 43.6 million t and targets output of between 74 million and 77 million t by the end of 2019 and 100 million t of capacity by 2020.

The company plans to roll out plants across Africa. In Tanzania, Dangote seeks to double the country's annual output of cement to 6 million t.

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