Massive Gas Find Draw Foreign Interests to Tanzania

Filed under: Business |
tanzania gas exploration e1340728443964 photo

A Petrobras exploration ship off east Africa

Recent announcements of massive offshore natural gas fields in Tanzania by different international exploration companies have placed the country on the world energy map.

According to the Ministry of Energy and Minerals, after recent discoveries Tanzania’s proven world class natural gas resources stands at a whooping 47 trillion cubic feet (TCF).

The exciting discoveries are expected to bring into the country billions of investment that might transform the economy, particularly in the energy, agricultural and manufacturing sectors. However, the Minister for Energy and Minerals, Professor Sospeter Muhongo, rightly said recently that there are a number of hurdles standing between production and potential gas wealth.

He listed some of the challenges as limited infrastructure and lack of skilled workforce as well as lack of policy and legal framework. It is encouraging to note that the government has already facilitated construction of a pipeline for transportation of natural gas from southern regions of Lindi and Mtwara to Dar es Salaam.

In September, last year, Tanzania and China signed a one billion US dollars (about 1.6tri/-) agreement for the construction of a 532-km gas pipeline from Mnazi Bay and Songo Songo to Dar es Salaam. The supplied gas is to be used for generation of electricity, directly firing industrial plants and motor vehicle engines as well as domestic use for various purposes.

Some experts say having a pipeline in place in Tanzania can produce up to 3,000 megawatts of electricity, a move that will make frequent power blackouts now being witnessed in many parts of the country history. It is hoped that thorough preparations are going to be swiftly made to enable Tanzanians benefit much from these huge natural gas resources.

Several members of parliament (MPs) last week said Tanzanians should avoid former mistakes by signing opaque contracts for capital-intensive mega-projects in the mining sector. The projects, according to critics, had little impact on the country’s economy because they don’t create many local jobs and investors are not taxed properly. The government should see to it that the country enters into win-win agreements and Tanzanians benefit from the multi-billion dollar industries.