East Africa becomes viable natural gas source as Tanzania looks to double output by 2015

(Bloomberg Businessweek) – Tanzania sees natural gas reserves more than doubling by early 2015 from the 40 trillion cubic feet discovered, as the east African country prepares to offer new exploration blocks as early as September this year.

“We have enormous amounts of gas,” Energy and Minerals Minister Sospeter Muhongo said in an interview yesterday. “We are now at 40 trillion cubic feet and I’m sure in the next two years we should be at more than a 100 trillion cubic feet.”

Statoil, Norway’s biggest energy company, last month raised estimates for discoveries in Tanzania’s Block 2 to as much as 13 trillion cubic feet of recoverable resources, enough to build a liquefied natural gas plant with Britain’s BG Group Plc. (BG/) The U.K. company has found 10 trillion cubic feet in neighboring blocks. Statoil said drilling on two to three new prospects may yield “high-impact” finds in 2013, defined as discoveries with reserves of more than 250 million barrels of oil equivalent.

More than 100 trillion cubic feet have been found in the area including neighbouring Mozambique, where Eni SpA (ENI) made the biggest gas discovery of the decade. Mozambique may have 250 trillion cubic feet of reserves, according to the country’s state-backed company Empresa Nacional de Hidrocarbonetos.

Tanzania will offer exploration permits between September and November, Muhongo said, after the country delayed a planned licensing round for nine blocks in September last year. Tanzania Petroleum Development Corp. will decide on a date for the round, he said, without giving the number of blocks to be awarded.