The family-owned conglomerate said in a statement profits will be shared “more or less 50-50” with the Tanzanian government as part of a production sharing agreement (PSA).
“Based on the current market prices, the gas resource is valued at $8 billion to a potential upside of $11 billion,” Dodsal said.
The company expects to bring the natural gas to market by the first quarter of 2018.
Dodsal said it lifted its reserve estimate to 2.7 tcf with a potential upside of 3.8 tcf from the previously announced figure of 2.17 tcf after an update of studies.
The onshore natural gas deposits were discovered at a field in the Ruvu Basin, which is located about 50 kilometers west of Dar es Salaam. Dodsal began exploring the site in 2009, two years after obtaining the concession rights there.
“It’s a game changer, this will change the economy of the country,” said Rajen Kilachand, chairman and president of the Dodsal Group. The gas discovery will boost Tanzania's total estimated natural gas reserves to more than 57 trillion cubic feet. Most of Tanzania’s earlier-discovered gas reserves are located in deep-sea blocks off its southern coast.
Kilachand said the gas discovery will help to eliminate Tanzania’s costly fuel import bills. The group also said the gas discovery will stimulate the local economy by creating jobs and boost Tanzania’s competitiveness.
Tanzania imported oil worth $2.76 billion in 2015, according to latest Bank of Tanzania (BoT) figures.
Oil and gas discoveries in Eastern Africa in recent years have transformed the region into a potentially major energy supplier, which has attracted interest from international energy giants.
Dodsal said it has already spent $200 million on its Tanzania project and plans a further $300 million of investments in the next two years to build its exploration and production capabilities in the country.
Plans are already in motion for Tanzania to begin gas exports over the next coming years after the government acquired the land for a site for the construction of a liquefied natural gas (LNG) plant in Lindi Region.
BG Group, acquired by Royal Dutch Shell, along with Statoil, Exxon Mobil and Ophir Energy plan to build an LNG export terminal in partnership with the state-run Tanzania Petroleum Development Corporation (TPDC).