By George Mwangi
Special to DOW JONES NEWSWIRES
Tanzania has a good chance of becoming a major producer and
exporter of natural gas over the next decade, said the
International Monetary Fund.
Significant offshore discoveries have been made over the last
two to three years and further exploration is underway, the fund
said in its recent country report for Tanzania.
"Although gas resources haven't yet been declared commercially
viable, estimates of discoveries indicate recoverable offshore gas
resources of at least 24 trillion-26 trillion cubic feet,
potentially sufficient for a four-train Liquid Natural Gas plant
(possibly as a common facility for several upstream gas fields),"
it said. "A final investment decision is expected at the earliest
in 2016 or 2017."
Total investment during the development phase could amount to
$20 billion-$40 billion, depending on the scale of the project.
This would be the largest investment ever in Tanzania, with gas
production starting in the 2020s, the IMF said.
"This is beginning to generate expectations that greater
spending is warranted by likely future revenues," the fund added.
"However, a final decision on whether to develop a large-scale
liquefied natural gas project using offshore gas resources may not
be made by the natural gas companies until 2016."
Also, the decisions to be made in the next few years--concerning
contracts and management of revenue--will have long-term
implications on whether the ensuing benefits from natural gas will
accrue to all citizens, the IMF said.
"A sharp slowdown in China, on the other hand, would reduce
prospective FDI (Foreign Direct Investment) and credit flows to
Tanzania, undermining key infrastructure investments and thereby
future growth," it said.
Norway's largest energy company Statoil ASA (STL.OS), U.K.-based
BG Group PLC (BG.LN) and Exxon Mobil Corp. (XOM) are planning to
build the first liquefied natural gas plant in the East African
nation to export natural gas.
Write to George Mwangi at realtimedesklondon@dowjones.com