Aminex: From Acorn to Oak – Chapter 5: First Gas

 When molecules finally flowed to market

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After years of drilling, licensing, and negotiating, the wait was over. In April 2016, Aminex announced that gas from the Kiliwani North-1 (KN-1) well had finally started flowing into Tanzania’s national grid.

It was a milestone not just for the company, but for the country. KN-1 marked the first time Aminex had moved beyond being a pure explorer and into the ranks of producing companies. Tanzania, meanwhile, gained a new domestic supply source to feed growing demand for power and industry.

The plan was a gradual ramp-up. Initial flows began at modest levels, with volumes increasing step by step over a 90–100 day commissioning phase until the system stabilised at around 25–30 million cubic feet per day. During that period, TPDC was invoiced monthly for gas produced, with payments made in advance under the security arrangements of the GSA.

For investors who had followed the company since the early Nyuni days, this was vindication. After more than a decade of waiting, Aminex could finally show a revenue line on its accounts — in hard US dollars.

It was also proof of concept. Gas from Kiliwani North flowed directly into the new Songo Songo processing plant and then into the pipeline system feeding Dar es Salaam. The whole chain — wellhead to processing to pipeline to end user — was now working. That mattered for the much larger discoveries in the Ruvuma basin, which would one day follow the same route.

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For Aminex, first gas was the reward for persistence. For shareholders, it was proof that the long story of licences, partners, and patient waiting had a tangible outcome. But as so often in oil and gas, the story didn’t end there. Within a year, new challenges emerged.

➡️ Next time: Chapter Six — Challenges and Decline. We’ll follow the pressure problems that reduced KN-1’s flow, forcing Aminex to rethink its strategy and refocus on the bigger prize in the Ruvuma basin.

Aminex: From Acorn to Oak – Chapter 4: Gas Sales Agreement

The signature that turned gas into guaranteed dollars

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By 2015, the pieces were lined up. Aminex had its discovery well, its government development licence, and Tanzania’s new processing plant and pipeline at Songo Songo were finally nearing readiness. What it still lacked was the most important piece of paper in any gas project: a sales contract.

That arrived on 13 January 2016, when Aminex announced that it had signed a fully-termed Gas Sales Agreement (GSA) with the Tanzania Petroleum Development Corporation (TPDC). For the company, it was the milestone shareholders had been waiting on for years.

The terms were clear, simple, and bankable:

• Price: US$3.00 per mmbtu (≈US$3.07 per mcf).

• Currency: Revenues in US dollars.

• Indexation: Annual adjustment using US CPI from 2016 onward.

• Structure: Take-or-pay depletion contract, ensuring TPDC had to either take delivery or pay for a minimum volume each year.

• Security: Monthly payments in advance, secured by letter of credit from Tanzania Investment Bank.

For a junior like Aminex, these terms were gold. Selling at the wellhead meant the joint venture partners didn’t shoulder pipeline or processing fees. The fixed dollar price insulated them from volatile global oil and gas markets. And the take-or-pay clause provided certainty that cash would flow even if volumes were lower than forecast.

It had been a long wait. The discovery was made in 2008, the development licence granted in 2011, and only now — eight years later — was Aminex in a position to sell gas. But when the GSA landed, it transformed the company overnight: a real producer in the making, not just an explorer.

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For investors, this RNS was a watershed moment. Aminex had crossed the line from “exploration story” to “revenue story.” After years of patience, shareholders could finally expect the next announcement to be about gas flowing and dollars in the bank.

➡️ Next time: Chapter Five — First Gas. We’ll follow the moment molecules finally moved from the wellhead into Tanzania’s national grid, and Aminex booked its first ever production revenues.

Ntorya Gas: The Hidden Backbone of Tanzania’s Energy Revolution

Why Aminex’s 25% stake in a $5.3B asset is massively undervalued—and essential to powering East Africa’s future.

Tanzania is at a crossroads of transformational change. With one of the fastest-growing populations in Africa, a government-led industrialisation push, and mounting regional energy demand, the country is setting the stage to become East Africa’s energy hub.

At the heart of this vision is the Ntorya Gas Field—a resource-rich onshore gas field discovered by Aminex plc (AEX: AIM) now in partnership with operator ARA Petroleum. While most headlines focus on offshore LNG megaprojects, Ntorya is quietly becoming the real enabler of near-term, high-impact development across power generation, clean cooking, and industrial expansion.

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🛢️ What Is Ntorya and Why Is It Crucial?

Located in Tanzania’s Ruvuma Basin, Ntorya is a discovered and appraised onshore gas resource with independently certified 2C resources of 3.45 TCF (trillion cubic feet). It is strategically located close to existing infrastructure:

• ~35 km to the Madimba Gas Processing Plant (connected to the national grid)

• Within reach of industrial zones, power plants, and LPG bottling networks

• Tied to the government’s pipeline construction timeline, now under execution

In July 2025, TPDC awarded a contract to Chinese EPC firms for the Ntorya–Madimba pipeline, aiming for first gas by July 2026.

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🚀 The Demand Side: Powering Growth and Decarbonisation

1. Electricity for a Growing Nation

Tanzania’s demand for electricity is surging, driven by:

• Industrial expansion (Kwala, Bagamoyo, Mtwara, and 5 new SEZs)

• Urbanisation and regional electrification (Kenya, Uganda, Zambia interconnectors)

• Replacement of expensive diesel generators in off-grid and peri-urban areas

Gas-fired power is a vital component of Tanzania’s Least Cost Power Development Plan, offering a flexible, cleaner alternative to coal and hydro. Ntorya’s gas could support:

• Mtwara’s planned 600 MW gas-fired plant

• Power exports via the Zambia–Tanzania interconnector (commissioning by 2026)

• Stability for the growing SEZ clusters

2. Clean Cooking Revolution

Over 85% of Tanzanians still cook with wood or charcoal, causing:

• Massive deforestation (est. 400,000 hectares lost annually)

• Respiratory diseases linked to indoor air pollution

• Lost productivity and gender-based labour burdens

The government’s Clean Cooking Energy Strategy 2024–2034 aims for 80% adoption of clean cooking solutions by 2034, with LPG and piped gas forming the backbone.

Ntorya—via processing at Madimba and planned bottling/distribution networks—could become a critical feedstock for LPG, accelerating this health and environmental imperative.

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🏭 Ntorya + Infrastructure: Perfect Alignment

The Tanzanian government is making record infrastructure investments, many of which require reliable gas supply:

Infrastructure Project	How Ntorya Supports It
Kwala Industrial Zone (2,000+ industries)	Pipeline link via Chalinze branch
Dar–Chalinze 102 km pipeline	Extends gas grid northward
Mtwara Corridor industrial sites	Direct proximity; gas-fuelled plants
Bagamoyo port/SEZ (700+ industries)	Industrial and export energy needs
5 new SEZs (TISEZA, Aug 2025)	Manufacturing zones require consistent gas/power

This infrastructure is not just domestic—Tanzania is now deeply tied into regional energy trade, with long-term plans for a Dar–Mombasa gas pipeline, power interconnectors to Uganda and Zambia, and LPG exports to neighbouring countries.

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💰 Aminex’s Ntorya Stake: A Multi-Billion-Dollar Revenue Stream in the Making

📦 Step 1: How Much Gas is 0.4 Tcf?

• 1 Tcf = 1 trillion cubic feet

• Aminex’s net discovered share: 0.4 Tcf

• In Mcf (thousand cubic feet):
  0.4 Tcf = 400 million Mcf

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💵 Step 2: Apply Realistic Price Scenarios

Price Scenario	Mcf Value	Gross Revenue
Base Case	$4.00/Mcf	$1.6 billion
Higher Case	$6.10/Mcf	$2.44 billion

Even under conservative pricing, Aminex’s gas could generate $1.6 billion in gross sales over its production life — rising to $2.44 billion using industry tariff averages.

This isn’t speculative: the Gas Sales Agreement (GSA) is signed, and Ntorya’s gas is destined for guaranteed demand through:

• Madimba Gas Plant

• Tanzania’s national grid

• Industrial zones like Kwala and Bagamoyo

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🧾 Step 3: What Does That Mean for Aminex?

While gross sales ≠ net profits, the exercise highlights one thing:

This is a multi-billion-dollar gross revenue stream backed by infrastructure, policy, and market need.

Factors such as:

• The Production Sharing Agreement (55–60% government take),

• Ongoing cost recovery (capex/opex), and

• Multi-year revenue timing

…will shape exact returns. But even adjusted for PSA terms, Aminex’s upside remains enormous.

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📊 Step 4: How It Compares

For context:

• Orca Exploration (operating in Tanzania’s Songo Songo field) averaged over $6/Mcf in 2023 gas sales.

• This validates the $6.10/Mcf industrial pricing used in our high case.

So Ntorya gas is likely to achieve higher-tier pricing, not just the base GSA rate — making the higher revenue scenario entirely realistic.

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🔍 Conclusion: Massive Value, Still Mispriced

With a current market cap around $100 million, Aminex is trading at:

• ~6% of potential gross revenue at base pricing

• ~4% of potential gross revenue at industrial pricing

This level of undervaluation—on a de-risked, demand-backed, GSA-approved, development-ready gas asset—is extraordinary.

As the Ntorya–Madimba pipeline moves toward first gas in 2026, investors have a rare asymmetric opportunity to enter a project with scale, timing, and strategic alignment fully in place.

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🌍 ESG & Energy Transition: A Stronger Investment Narrative

Ntorya is not just a resource—it’s a climate-aligned, impact-driven energy project. It:

• Displaces biomass and diesel with cleaner, reliable gas

• Supports health, education, and gender equity through clean cooking

• Boosts Tanzania’s ability to trade energy regionally and grow sustainably

For impact funds, ESG-aligned investors, or frontier energy portfolios, Ntorya offers high upside with positive social and environmental impact.

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🧠 Final Thoughts: Ntorya Is Not Optional—It’s Foundational

Tanzania’s bold industrial, electrification, and clean cooking goals depend on gas that’s already discovered, already financed, and already being built.

Ntorya is:

• Strategically located

• Nationally prioritized

• Technically de-risked

• Financially undervalued

As first gas approaches in 2026, and pipeline works begin in earnest, the clock is ticking on this unique asymmetrical opportunity. For investors willing to look beyond the offshore LNG fog, Ntorya and Aminex offer clarity, impact, and returns.

What Is Aminex’s 0.4 Tcf of Gas Really Worth?

Breaking down Ntorya’s discovered resources, gas pricing, and billions in potential sales revenue.

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Asking the Question

In our first two articles we compared Ntorya’s discovered gas with Cove Energy’s 2012 sale, and then explored the much larger basin upside. But let’s pause on a simpler, practical question:

“If Aminex’s share of Ntorya is ~0.4 Tcf recoverable, what could that actually be worth in revenue?”

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The Price of Tanzanian Gas

Gas in Tanzania is not sold at global LNG prices but at regulated domestic tariffs. Still, the market is attractive because:

• The Gas Sales Agreement (GSA) for Ntorya is already signed.

• Demand is guaranteed: gas will feed directly into power plants and industrial users via the Madimba plant and national grid.

• Industrial tariffs have been reported around $6.10 per thousand cubic feet (Mcf) — reflecting a blend of state-regulated pricing and the premium paid by industry.

• For sensitivity, we can also consider a lower $4.00/Mcf base case (a conservative benchmark for domestic gas).

(Orca Exploration’s 2023 results showed average realised prices above $6, which reinforces the higher case as realistic.)

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Step 1: How Much Gas is 0.4 Tcf?

• 1 Tcf = 1,000,000,000,000 cubic feet.

• 0.4 Tcf = 400,000,000,000 cubic feet.

• In units of 1,000 cubic feet (Mcf):

  • 400,000,000,000 ÷ 1,000 = 400,000,000 Mcf.

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Step 2: Apply the Prices

• Base Case $4.00/Mcf

  • 400,000,000 Mcf × $4.00 = $1.6 billion gross revenue.

• Higher Case $6.10/Mcf

  • 400,000,000 Mcf × $6.10 = $2.44 billion gross revenue.

So even Aminex’s 0.4 Tcf net discovered share alone could generate between $1.6bn and $2.4bn gross sales over the life of production.

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Step 3: What Does That Mean for Aminex?

Of course, gross sales are not the same as free cash:

• Tanzania’s Production Sharing Agreement (PSA) splits revenue with the government.

• Capex and opex must be recovered.

• Timings matter — revenues arrive over many years, not in one lump sum.

But the exercise shows something important:

• Even using conservative domestic pricing, Aminex’s discovered gas represents a multi-billion-dollar gross revenue stream.

• Against a current market cap of ~£80m (≈$100m), that scale looks highly attractive.

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Step 4: The Benchmark

To put this in context:

• Orca Exploration reported average realised gas prices of over $6/Mcf last year.

• That aligns neatly with our $6.10/Mcf higher case.

• It reinforces that Ntorya’s gas, once flowing, is likely to achieve pricing toward the higher end of our range.

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Closing Thought

Asking “what is 0.4 Tcf worth?” shows why Ntorya is such a strategic asset. Even before considering the 16+ Tcf upside in the wider basin or the possibility of oil, Aminex’s discovered gas alone equates to billions of dollars in potential sales.

And with TPDC funding the pipeline and infrastructure in place, this value is not a theoretical number — it is linked directly to a contracted market hungry for supply.

For investors, that underlines the simple truth: Ntorya is underpinned by real demand, real contracts, and real scale — and the upside could be far greater.

Aminex Ara Breaking Ground: Ntorya Moves Closer to First Gas

Visible steps are aligning as infrastructure, wells, and regulatory milestones converge toward production.

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A Project Now in Motion

The Ntorya development in southern Tanzania is advancing step by step toward its goal of delivering gas into the national grid via the Madimba pipeline. With approvals secured, funding confirmed, and procurement of facilities under way, the project is steadily progressing along its critical path.

Investors are understandably keen to see “hard evidence” — rigs mobilising, welders on the pipeline, or CPF construction above ground. Those milestones are coming, but there is already much happening that gives confidence in the journey ahead.

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Upcoming Milestones: The Roadmap Ahead

1. EPC Contract Awarded

The Engineering, Procurement, and Construction (EPC) contract for the 35 km pipeline has been officially awarded to China Petroleum Pipeline and China Petroleum Technology & Development Corporation. This ensures the pipeline’s delivery is now in the hands of experienced international contractors.

2. Pipeline Fully Funded

The pipeline construction is being fully financed by TPDC, the national petroleum corporation. This reduces financial risk for the operators and demonstrates the Tanzanian government’s strong commitment to bringing Ntorya gas to market.

3. NT-2 Extended Well Test & CPF Integration

NT-2 has been identified as the first producing well. An extended well test will confirm reservoir behaviour and fine-tune the CPF’s design specifications. Importantly, this does not delay CPF construction — procurement and enabling works can proceed in parallel, with the test results helping optimise the final equipment setup.

4. PURA Approval for Rig Tender

The regulator, PURA, is reviewing rig tender plans. Approval of this plan is a milestone in itself, as it enables the operator to issue the formal rig tender.

5. Rig Award and Mobilisation

Once the tender is awarded, a drilling rig will be mobilised. Its first task: drill CH-1 (Chikumbi-1). The same rig will then conduct a workover of NT-1. This is a crucial step in adding redundancy and ensuring multiple wells can feed into the CPF and pipeline.

6. CPF Civil Works and Site Preparation

The approved US$41 million budget includes the CPF, flowlines, manifolds, and fiscal meters. While there has been no formal announcement of CPF mobilisation, satellite imagery in the wider Ntorya area shows ground activity that could indicate early site preparation. This should be regarded as an educated observation, not official confirmation.

Such early groundwork is entirely consistent with the development sequence — clearing land, preparing foundations, and creating storage areas typically begin before heavy equipment arrives, ensuring a smooth transition into construction.

7. First Pipeline Welds

The first welds on the pipeline right-of-way will provide unmistakable, visible proof of progress. This is one of the clearest signals investors can look for as the project enters the physical build stage.

8. First Gas Flow

All of these steps lead to the same target: the delivery of 40 MMscf per day under the Gas Sales Agreement in the first contract year, with capacity to grow further.

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Investor Takeaway

Milestone	What It Demonstrates
EPC awarded	Contractors in place, work authorised
Pipeline funding by TPDC	Full state backing, no financial burden on operator
NT-2 extended test	Optimises CPF design, not a blocker
PURA approval for rig tender	Regulatory progress, green light to issue tender
Rig award & mobilisation	Visible drilling and well activity
CPF enabling works	Site preparation under way, consistent with plan
First pipeline welds	Physical build begins in earnest
First gas	Contracted supply of 40 MMscf/d delivered

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Conclusion

Ntorya is progressing through a clear sequence of milestones. Some are less visible than others, but each is a step toward first gas. With the pipeline EPC awarded, funding secured, and wells prepared for development, the project is firmly moving forward.

The next stages — rig mobilisation, CPF civil works, and the first pipeline weld — will provide the visual proof that investors are waiting for. From there, Ntorya transitions rapidly from preparation to production, with 40 MMscf/d contracted under the GSA and a scalable pathway for growth.