It would be easy to get carried away by Tanzania’s LNG potential but progress on the project has ground to a halt previously, so the government would do well not to rely on the income it would generate just yet.
The presence of huge offshore gas reserves on both sides of the Tanzanian-Mozambican maritime border has been known for at least a decade. Local demand in the region is limited, so LNG was the obvious option, as it allows the gas to be shipped by tanker around the world. However, a combination of a violent Islamist insurgency on the Mozambican side of the border and uncertainty over global demand saw projects in both countries suspended, bar a smaller floating LNG scheme off Mozambique.
However, global consumption has greatly increased over the past year, mainly because of the Russian invasion of Ukraine. Russia has long been the world’s biggest gas supplier but Moscow restricted piped gas supplies to most of its European customers in response to…