UPDATE 2-BG Group's Tanzania gas find raises LNG hub hopes
* Discovery brings total reserves to 7 TCF
* BG Group, Ophir see 9 TCF as minimum for LNG plant
* JV targets 4.6 TCF from next drill site
By Oleg Vukmanovic and Brenton Cordeiro
LONDON/BANGALORE, March 26 (Reuters) - BG Group's major gas discovery in Tanzania brings it a step closer to bankrolling a two-train liquefied natural gas (LNG) export plant along the prolific east African coastline, promising billions more worth of investments and raising hopes of the area's export potential.
The proximity of east Africa's second biggest economy to Asia makes it well positioned to reap the benefits of surging fuel import demand in Japan, China and India, enticing investors to fund export projects.
Operator BG Group and Africa-focused joint venture partner Ophir Energy said on Monday they discovered more gas than estimated off the coast of Tanzania,adding an estimated 3.4 trillion cubic feet (TCF) in recoverable reserves from the Jordari-1 well in block 1, 55 percent more than initially expected.
This brings results from all four wells drilled in blocks 1, 3 and 4 in Tanzania close to 7 TCF, just 2 TCF short of the minimum reserve threshold to build a two-train LNG plant, a source at the joint-venture said.
The venture is targeting mean recoverable reserves of 4.6 TCF from the next exploration well to be drilled at Mzia-1, potentially paving the way for an export project.
"The plan to build a two-train LNG plant is a key focus for the companies," the source said.
Analysts from Citi expect BG Group to invest between $10-$20 billion in Tanzania in the second half of the decade, according to a client note.
Neighboring Mozambique, which last month estimated that energy firms will spend 50 billion dollars over the next decade to develop liquefaction plants, looks set to cash in on a gas bonanza as oil and gas companies flock to East Africa to tap the area's potential.
At the same time as BG Group and Ophir Energy announced their expectation-beating find, Italy's biggest oil and gas group Eni made a new giant natural gas discovery offshore Mozambique which will boost the potential of its Mamba complex to at least 1,133 billion cubic metres (bcm) or 40 trillion cubic feet of gas.
BG Group holds 60 percent of the three blocks offshore Tanzania, with Ophir holding the rest.
"3.4 TCF recoverable at Jodari is the strongest possible start to the five-well 2012 Tanzania drilling campaign," Investec's Stuart Joyner said.
"This is a very strong start to our five-well 2012 Tanzania drilling campaign and the Metro-1 drillship will now move to drill Mzia-1, which is targeting mean recoverable resources of 4.6 TCF," Ophir said.
That well will take 75 days to drill.
BG's shares were up about 1.3 percent at 1512 pence at 1145 GMT on Monday on the London Stock Exchange, while those of Ophir rose 19 percent to 478.95 pence.