* New energy policy draft measures
* East Africa gas finds attracting companies
By Fumbuka Ng'wanakilala
DAR ES SALAAM, March 6 (Reuters) - Tanzania will givepriority to domestic use of its natural gas resources overexports under energy policy draft measures seen by Reuters onFriday.
The measures were approved by new energy and mineralsminister George Simbachawene.
As in other African countries, a debate in Tanzania hasfocused on how much of its hydrocarbon reserves should be usedlocally and how much can be exported.
East Africa has become one of the world's most sought-afteroil and gas regions with a string of vast discoveries attractingforeign companies seeking new sources to supply energy-hungryAsian markets.
Tanzania's new rules reinforce a natural gas policy passedby cabinet in 2013. That policy proposed tough conditions onforeign companies and assurances that the domestic market wouldtake priority over exports.
However, the natural gas policy has yet to be passed intolaw by parliament.
Tanzania is estimated to have 53.28 trillion cubic feet(tcf) of gas, and has said that could rise four-fold over thenext five years, putting it on par with some Middle Eastproducers.
Its gas policy also seeks to address a standoff betweenTanzania's mainland and its semi-autonomous islands of Zanzibarregarding the sharing of any future hydrocarbon revenue.
"Ownership of oil and gas resources is vested to the peopleof the Tanzania mainland, and must be managed in way thatbenefits the entire society," according to the latest draftmeasures.
The revenue-sharing dispute has prevented Royal Dutch Shell from beginning exploration on four blocks off Zanzibaror selling stakes in its exploration rights.
Ahmed Salim, senior associate at consultancy TeneoIntelligence, said in a note to clients on Friday said one focuswas the extent to which prioritising the domestic market mightaffect natural gas legislation.
"Draconian measures such as export restrictions should notbe expected, but regulatory frameworks such as strong localcontent policy should be anticipated," Salim said.
British company BG Group, together with partnersExxon Mobil, Statoil and Ophir Energy,plans to build a two-train LNG export terminal, expected tostart operating in the early 2020s. A final investment decisionis set for 2016 at the earliest. (Editing by James Macharia and Jason Neely)
