Tanzania’s Gas Policy Prioritizes Domestic Market

Tanzania’s newly approved Natural Gas Policy aims to “ensure that the domestic market is given first priority over the export market in gas supply.” Gas producers in the country will have domestic supply obligation and localization is emphasized down the value chain.

The country currently generates 450MW of electricity from gas-fired plants, fuelled by reservoirs from marginal, shallow water fields. In the last three years however, deepwater discoveries have displayed the country prominently on the gas map of the planet, with the Tanzanian government official estimates of gas reserves standing at 42.7-trillion cubic feet as of September 2013.

The gas policy, approved in early October 2013, will be adopted into a law of the Tanzanian parliament, christened the Natural Gas Act, which regulates mid and downstream activities of the industry, including gas processing, liquefaction, transportation, storage and distribution. It calls for the establishment of a natural gas revenue fund to ensure transparency and accountability over collection, allocation, expenditure and management of all natural gas revenues.

The policy prescribes that natural gas processing take places on shore, so that activities around the projects can impact the local economy more.