Tanzania has announced its first natural gas discovery in more than a decade, identifying an estimated 223bn cubic feet at the Mnazi Bay field in the country’s south, where production could begin as early as November.
The find offers Tanzania an opportunity to increase domestic gas supplies at a time when the government is seeking more reliable energy for electricity generation and industry. It also comes as the country courts investors for smaller LNG projects while pursuing a much larger gas export development that has spent years on the drawing board.
First major discovery in over a decade
Energy Minister Juma Homera announced the discovery on October 27, saying the gas had been found at the Kasa-1X ST2 well in the Mnazi Bay area of Mtwara.
The exploration was carried out by the state-owned Tanzania Petroleum Development Corporation (TPDC) and French energy company Maurel & Prom, according to Reuters.
The discovery follows a drilling programme involving three wells — MB-5, MS-2 and Kasa-1X ST2 — designed to strengthen production and explore additional gas resources.
For Tanzania, the significance lies partly in the timing. The country already has substantial natural gas resources, but bringing new discoveries into commercial production has proved difficult.
Before the latest announcement, Tanzania’s discovered gas volumes stood at approximately 57.5 trillion standard cubic feet, according to its energy regulator.
The new find is small compared with that national total. Its advantage, however, is its location within an established gas-producing area, where existing infrastructure could help bring additional supplies to market.
Maurel & Prom has raised expectations that the discovery could begin contributing to Tanzania’s gas supply within weeks.
In its October 22 operational update, the company said production from Kasa-1X could start as early as November 2026, with potential output of 50 million cubic feet daily.
The company estimated the discovery at approximately 200bn cubic feet, slightly below the 223bn cubic feet announced by Homera. The figures are preliminary estimates and should not yet be treated as independently certified proved reserves.
Drilling began in June, with the well reaching a target 4.5 kilometres offshore. Further drilling encountered 588 metres of reservoir, strengthening confidence in the discovery.
Mnazi Bay is already producing approximately 130 million cubic feet of gas daily, helped by the commissioning of MB-5 and MS-2 earlier this year.
Those wells have increased the combined production potential of the existing wells to nearly 200 million cubic feet daily. Actual output remains dependent on processing capacity and customer demand.
Four investors eye LNG opportunities
Beyond the immediate production boost, Tanzania hopes the discovery will encourage more investment in its domestic gas industry.
Homera said TPDC was in discussions with four prospective investors planning small-scale liquefied natural gas projects.
These facilities could allow gas to reach industrial customers beyond the country’s existing pipeline network, opening new markets for domestic production.
That could be particularly useful for manufacturers requiring dependable energy supplies, including fertiliser producers, food processors and other energy-intensive businesses.
But investor interest is only the beginning. Projects will still need financing, infrastructure and customers willing to commit to purchasing the gas.
Tanzania has already worked to strengthen its position in the sector, including TPDC’s $23.6m investment to increase its stake in Mnazi Bay.
The latest discovery gives the partners another opportunity to expand an established producing asset.
Bigger LNG ambitions remain unresolved
While Mnazi Bay offers the possibility of additional gas supplies in the near term, Tanzania’s larger LNG ambitions remain a longer-term undertaking.
The country is also negotiating a separate $42bn LNG export development led by Equinor and Shell, which would commercialise substantial offshore gas resources through a proposed export facility in Lindi.
The government says an agreement with international investors is approaching, although years of negotiations have yet to produce a final investment decision.
Much of the commercial and fiscal bargaining has been completed, leaving legal agreements and subsequent investment approvals among the outstanding hurdles.
Unlike the Mnazi Bay development, the proposed export project would require substantial new infrastructure and billions of dollars in committed capital before construction could proceed.
The two projects operate on very different scales, but both reflect Tanzania’s determination to secure greater economic value from its natural gas resources.
Turning gas into economic gains
For now, the immediate priority is to bring the newly discovered gas into production and ensure that additional supplies can reach customers.
The November timetable is encouraging, particularly because Mnazi Bay already has production facilities and an established market.
Whether the discovery delivers lasting economic benefits will depend on how much gas can be recovered commercially, the cost of producing it and the availability of buyers.
For Tanzania’s manufacturers and electricity producers, dependable supply matters more than the size of a discovery announcement.
After more than a decade without a new gas find of this kind, Mnazi Bay offers a welcome development. The next measure of success will be the gas that reaches the market, the industries it supports and the investment it helps attract.
