Tanzania's Energy Industry

Tanzania: Potential Gas Giant

On the back of large gas discoveries off the country’s eastern coast, Tanzania has become one of the most promising East African hydrocarbons markets.  Tanzania began producing natural gas in 2004, when operations were launched at two onshore gasfields: Songo Songo and Mnazi Bay. According to Eni’s World Oil & Gas Review, in 2016 Tanzania produced 870 mcm (30.7 bcf) of natural gas, all of which was consumed domestically.

Discoveries of large offshore natural gas deposits, made since 2010, have pushed Tanzania’s gas reserves to more than 1.6 tcm (57 tcf) as of 2016. In 2014, BG, which has since been acquired by Shell, in collaboration with Statoil and Tanzanian Petroleum Development Corporation (TPDC) announced development plans based on these deep offshore finds. The consortium intends to build a USD 30-billion, two-train, 15-million-tpy onshore LNG export terminal in Tanzania’s Southern Lindi region. After the final investment decision, expected in 2018 after agreements between the government and investors are reached, the development is expected to be completed by the early 2020s. Participants currently involved in the project include Shell, Statoil, ExxonMobil, Ophir Energy and the TPDC.

In March 2016, Dubai-headquartered Dodsal Group made Tanzania’s first large onshore gas discovery with a 76.4 bcm (2.7 tcf) find in the country’s Ruvu Basin region. Potential reserves are estimated around 107.6 bcm (3.8 tcf). Ultimately, the discovery could represent between USD 8 billion-11 billion worth of natural gas. The country’s economy has suffered over the past few years in the midst of sluggish global economic growth and depressed commodity prices. However, the current government is pushing for the development of Tanzania’s yet untapped offshore gas reserves in order to generate new streams of revenues for the state and boost economic growth. The Tanzanian government has favourable attitude towards foreign investment and has managed to attract large IOCs to explore the country’s hydrocarbon reserves.