Investor interest in East Africa’s gas reserves is increasing as the region further secures itself as a potential new supplier of liquefied natural gas (LNG).

Thai oil firm PTT Exploration and Production is continuing its battle with Royal Dutch Shell in its bid to take over British explorer Cove Energy, a firm with operations in Tanzania, Kenya and Mozambique.

PTT has extended its deadline for investors to accept a US$1.9bn takeover bid, following Royal Dutch Shell’s decision in late June to up its offer.

Investor appetite for the region has been further whetted by a number of discoveries of natural gas reserves made off the coast of Africa during the first half of this year.

In March Italian oil group Eni revealed details of a find that could increase the resource base of its exploration block by 10 trillion cubic feet (tcf). In May, British firm BG Group announced its fifth consecutive gas discovery in Tanzania.

In June, US firm Anadarko Petroleum announced its Atum discovery within its offshore block in the Rovuma Basin. This new find is just 10 miles from the firm’s Golfinho discovery, also discovered in 2012.

This Atum-Golfinho complex holds 10—30-plus tcf of recoverable natural gas reserves, and according to an official statement from Bob Daniels, senior vice-president at Anadarko, the complex has “the potential to underpin a large LNG development“.

Anadarko has been active in Mozambique since 2006 drilling wells within its Prosperidade complex, which has between 17-30-plus tcf of recoverable resources.

The company alongside its partners is now looking to establish an onshore liquefaction facility consisting of at least two trains and with the capacity to produce 5 million tonnes of LNG per year.

Sponsors of this LNG project are Anadarko with a 36.5% stake, together with Mitsui (20%), ENH (15%), Bharat and Videocon (both 10%) and Cove, the target of the Shell and PTT bidding war, holding an 8.5% stake in the project.

If the Cove takeover is successful, the market is expected to welcome the involvement of an LNG player like Shell or PTT as the Mozambique LNG project progresses.

Société Générale was awarded the financial advisory mandate for the project in April. It has not been decided whether the upstream development would be linked to Prosperidade, Golfinho or Atum complexes, but the level of reserves has the potential to support multiple trains of LNG.

As the project is in the very early stages of development, it is not known exactly when it will be taken to market for financing, but it is anticipated it will be sometime in 2013.

Mozambique is emerging as one of the world’s fastest growing economies due to the increasing interest in its oil and gas reserves. However, the country’s infrastructure and economy are still hampered by years of civil war and under-investment. Over half of the country’s population still live in poverty.

The Andarko-led LNG project could be the largest foreign investment to be made in Mozambique to date. Positioning Mozambique as a significant future exporter of LNG, particularly into the energy-hungry Asian market, would bring much-needed revenue into the country.