A recent gas field development in Tanzania, the first in the last decade, has modest volumes, but its appearance is seen as timely for the country's needs.
This field is jointly operated by the state corporation Tanzania Petroleum Development Corporation (TPDC) and the French operator Maurel & Prom (M&P), which holds a 60% stake in the license. According to a previously published M&P report, production is estimated at approximately 200 billion cubic feet gross, of which 120 billion belongs to the company, and the potential gross production is 50 million cubic feet per day. Production is expected to begin in early November, and the gas will be intended for domestic use, industry, and transport.
Small addition to existing reserves
Tanzania's discovered reserves amount to 57.54 trillion cubic feet, so the new find increases this volume by only about 0.4% according to calculations. Furthermore, it represents only about 8% of the largest find in the country, which was made in 2016 and amounted to 2.7 trillion cubic feet. In the coastal blocks managed by Equinor and Shell, there are tens of trillions of cubic feet, and the long-awaited LNG plant in Lindi is planned with a capacity of 10–15 million tons per year.
The advantage provided by the Mnazi Bay field is its proximity. It is located onshore, near existing infrastructure in Mtwara, and regional pipelines already supply power stations in Dar es Salaam. In 2024, gas supplied almost 80% of Tanzania's electricity, and Mnazi Bay is one of the fields behind this figure. M&P's average output at this site in the first nine months of 2026 was 67 million cubic feet per day, which is 12% higher than the previous year, allowing for the rapid connection of new volumes.
Gas demand issue
A more important question is who will buy this gas. Energy may not be the only consumer. The Julius Nyerere hydroelectric power plant, with a capacity of 2115 MW, commissioned in August, increased the installed capacity to 4646 MW with a peak demand of 2271 MW, creating a surplus of over 2300 MW. Homer himself emphasized that this discovery should contribute to industrial growth, not just energy, noting that demand is growing 'especially during' periods of economic activity expansion.
This points to other areas of application. Compressed natural gas is already used to fuel vehicles in Dar es Salaam, and drivers who have switched to dual-fuel systems save money because local gas is cheaper than gasoline. TPDC reports that it is negotiating with four potential investors on small-scale LNG projects, which will allow gas to be delivered to areas not reached by pipelines. Supply security is also important: at the end of September, Orca Energy warned that its operations at the Songo Songo field might end after the expiration of the license on October 10, pending approval of the sale. A new gas source is welcomed into a system that still heavily relies on a few fields.
LNG shadow
Everything related to Tanzanian gas is assessed relative to the $42 billion Lindi LNG project, which Equinor and Shell have been discussing for many years. This project has been postponed for over a decade due to disputes over taxation, local content requirements, and domestic gas obligations. In January, a high-ranking minister told Reuters that Tanzania expects to sign an agreement by June, with production starting in about eight years.
The find of 223 billion cubic feet will not replace this large project. However, it demonstrates that the country is still capable of successfully conducting exploration after a period of lull in exploration that raised doubts about the future of the coastal basin. If this find helps shape an internal market for gas, including industrial buyers, LPG, and small-scale LNG, it could strengthen the arguments for larger investments. Now the key is whether pricing and regulation will allow this market to develop.