* 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 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
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
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
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.