Tanzania has discovered 223 billion cubic feet (bcf) of natural gas at the Kasa well in the Mnazi Bay block, raising prospects for increased domestic energy supply, industrial investment and employment opportunities.
Energy Minister Juma Homera announced the discovery on Tuesday, October 27, 2026, describing it as a major breakthrough for the country's oil and gas industry, which had not recorded a new gas discovery since 2015.
The discovery comes as Tanzania seeks to expand its energy supply to meet growing demand from industries, households and other economic activities, while reducing exposure to fluctuations in international energy markets.
Dr Homera said the new resource would strengthen the country's efforts to secure reliable and affordable energy, particularly as industrialisation and economic activities continue to increase demand for electricity and other forms of energy.
"Tanzania's development across various sectors, including industries, is accelerating. This is driving a significant increase in demand for energy for electricity generation and other industrial and household uses," he said.
He added that consumers increasingly needed energy that was clean, safe, reliable and affordable.
The minister credited President Samia Suluhu Hassan's leadership and government support for creating an environment that enabled continued investment in the energy sector.
Natural gas has become an important component of Tanzania's energy mix since its discovery in 1974. Commercial production began in 2004, with the resource subsequently supporting electricity generation and supplying industries, households and vehicles.
The latest discovery was made through the Tanzania Petroleum Development Corporation (TPDC), working with its private-sector partners in the Mnazi Bay block.
A significant development in the project was TPDC's decision to increase its stake in the block from 20 per cent to 40 per cent in 2024 through the acquisition of additional shares.
The move strengthened the state corporation's participation in strategic decisions concerning the development of the resource.
Beyond electricity generation, the government expects the discovery to create opportunities for expanding the domestic use of natural gas, particularly in manufacturing and clean cooking.
Dr Homera said increased gas availability could help lower energy costs for households and businesses, while supporting the development of petrochemical industries producing products such as plastics and fertilisers.
The potential production of fertilisers from domestic gas resources could also support agriculture by creating opportunities for local production and reducing reliance on imported industrial inputs.
The discovery is expected to strengthen energy security by increasing access to locally produced resources and reducing dependence on imported energy, whose prices and availability are vulnerable to international market movements and geopolitical tensions.
The government is also looking to attract investors to develop additional gas-related infrastructure and processing facilities.
Dr Homera said TPDC was in discussions with four investors interested in establishing small-scale liquefied natural gas (LNG) projects, three of which are expected to be located in Mtwara.
The proposed investments could create jobs and expand the use of natural gas in the transport sector, particularly as an alternative to petrol and diesel.
Currently, more than 80 per cent of natural gas produced from the Mnazi Bay block is used for electricity generation through Tanzania Electric Supply Company (Tanesco) power plants in Mtwara and Dar es Salaam.
The new discovery is also expected to increase government revenue through profit gas allocations under Production Sharing Agreements (PSAs), TPDC's earnings as a shareholder and taxes generated from related economic activities.
Mtwara Region and its local authorities could also benefit from increased business activity, employment and demand for local services as the resource moves towards development.
Dr Homera said the existing Mnazi Bay operations had already created opportunities for local participation, with approximately 200 Tanzanians employed through local companies.
He said 35 contracts worth more than TZS20 billion had been awarded to local businesses, providing opportunities for domestic suppliers and service providers to participate in the oil and gas value chain.
Tanzanians account for 95 per cent of employees in gas production and processing activities, while the Madimba Gas Processing Plant is operated entirely by Tanzanian workers.
The minister said the achievements reflected growing local capacity in the sector through employment, skills transfer and the participation of domestic companies.
However, the economic benefits of the 223bcf discovery will depend on how quickly the resource can be appraised, developed and connected to the infrastructure needed to bring it to market.
The announcement was witnessed by the Permanent Secretary in the Ministry of Energy responsible for petroleum, Dr James Mataragio, ministry officials, heads of institutions under the ministry and members of the Parliamentary Standing Committee on Energy and Minerals.
Dr Homera commended TPDC's management, board of directors and technical teams, alongside other institutions under the ministry, for their contribution to the discovery.