Tanzania Says Gas Reserves Rise 18% to Reach 55 Trillion Cubic Feet

Tanzania Says Gas Reserves Rise 18% to Reach 55 Trillion Cubic Feet

Tanzania Says Gas Reserves Rise 18% to Reach 55 Trillion Cubic Feet

The FINANCIAL -- Tanzania's known natural gas reserves have increased by up to 18% in the last 12 months following a number of discoveries in offshore blocks, the energy and minerals ministry said on June 8, according to Nasdaq.

In a statement, the ministry said that the country's natural gas reserves now stand at 55.08 trillion cubic feet, up from 46.5 Tcf last June following finds in blocks off the country's southeastern coast.

The larger reserves are a major boost for Tanzania's fledging natural gas sector as the East African nation continues with plans to build a gas export plant targeting energy-hungry Asian markets. With more than 100 Tcf of natural gas already discovered in neighboring Mozambique, the region is poised to become the next natural gas hub on the continent, analysts say.

The energy and minerals ministry said the 532-kilometer gas pipeline, connecting the offshore oilfields to the port city of Dar Es Salaam is complete and will be commissioned in September.

The pipeline is expected to increase gas supplies to several gas-fired plants as Tanzania seeks to wean its electricity sector away from aging and unreliable hydro-power plants. A spokeswoman for the ministry said that fresh gas supplies will save the country around $1 billion a year in oil imports for electricity generation.

Companies including Norway'sStatoil ASA (STO), Exxon Mobil Corp. (XOM) of the U.S., Italy'sEni SpA (E) and the U.K.'sBG Group PLC (BG.LN) have made a series of finds off the coast of Tanzania and Mozambique in recent years, making the region a hotspot for energy investors.

The U.S. Geological Survey estimates that East Africa's coastal region has potential reserves of up to 441 Tcf of natural gas.