Ras Al Khaimah Gas Company (Rak Gas) said it expected to reach its full production capacity of 150 million cubic feet per day (cfpd) of gas by the end of next year after fixing technical problems.

Ruurd Abma, chief executive, also said on Tuesday the firm was in talks with the Tanzanian government to build a gas pipeline and expected the negotiations to be finalised in the next three to four months.

Rak Gas Company is the state-owned natural gas utility of Ras Al Khaimah, a northern emirate in the United Arab Emirates sitting on the Strait of Hormuz, through which 40 percent of the world's seaborne oil passes.

Rak Gas currently produces 115 million cfd from four fields. "Our designed capacity is 150 million cfd, which we expect to reach by end of 2012," he told reporters.

Some technical problems have delayed achieving full capacity, he said.

Rak Gas has invested $300 million over the past four years to upgrade and expand its gas facilities and pipelines.

Planned investment this year and the next year for gas facilities could be small, Abma said. "It could be $15 million this year and another $15 to $30 million next year," he said.   

Rak Gas, which has secured three concessions to explore oil or gas in Tanzania in 2008, has not yet started production in the East African country, because a lack of infrastructure has delayed progress, Abma said.
   
Negotiations are underway with the government to lay a pipeline, he said. "We expect the negotiations to conclude in three to four months," he said.

"Tanzania is a low-cost entry so far." - Reuters