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International Gas Outlook and Implications for Developing Tanzania’s Gas Projects

As part of our partnership with Uongozi, CCSI has written a brief that assesses the international gas outlook and long-term implications for the development of Tanzania's offshore gas deposits. As the country looks to use a proportion of the gas domestically to support its development strategy, the brief places particular focus on issues that need to be considered in the final negotiations related to the arrangements of the domestic gas allocation.

We find that Tanzania's gas deposits are competitively placed to serve LNG markets post-2025. As such, the Government should continue to develop its petroleum regulatory regime and build its institutional capacity to support and regulate the gas sector. One of the key components that will determine whether the projects will move ahead is the domestic gas allocation arrangement. The Government has the difficult task to negotiate an agreement that balances the national interests with the requests of the International Oil Companies. The companies prefer to service the export markets. For Tanzania, the tradeoff will be between tax revenues, which are likely going to be higher if the gas is exported, and the potential use of the gas domestically for power generation, residential use and as feedstock to promote industrialization.

Upon analysis of the National Gas Master Plan, the brief provides strategic considerations that the Government of Tanzania should assess to help with the domestic gas allocation decision-making process. The brief can be accessed here.

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