Tanzanian President Jakaya Kikwete says Australian companies are welcome to develop his nation's vast gas reserves.
Mr Kikwete on Tuesday met with Prime Minister Tony Abbott in Canberra as part of a four-day visit, just months before he ends his second and final term as leader of the east African nation.
"We invite companies to develop the LNG, make use of the natural gas to produce other products," the president said at the opening of the talks.
"I'm here to discuss how to further our relationship on a political level."
About 18 Australian mining firms have more than 100 operations in Tanzania, which has the second largest gas reserves in east Africa, after Mozambique.
Mr Abbott said he hoped to build on the existing business ties.
"While we are separated by a great ocean, we are reaching out our hands across the ocean," he said.
The two leaders are also understood to have discussed security issues, including the threat from al-Shabab, which is part of the Islamic State network.
Tanzania is keen to harness the use of Australian vocational trainers and universities.
On Wednesday, Mr Kikwete will receive an honorary Doctor of Laws from the University of Newcastle, which has offered scholarships to Tanzanian students for many years.
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