* Tanzania has become a hot spot for gas exploration
* Residents want greater share of gas development
By Fumbuka Ng'wanakilala
DODOMA, May 22 (Reuters) - Residents of a gas-rich region of Tanzania rioted on Wednesday to protest that they would not benefit from a government budget proposal to construct a pipeline from their territory to the capital, senior officials said
Tanzania estimates it has more than 40 trillion cubic feet (tcf) of recoverable natural gas reserves. Discoveries off east Africa's seaboard have led to predictions the region could become the world's third-largest exporter of natural gas.
Residents of the southern Tanzanian Mtwara region are opposing the construction of a 532 km (330 mile) pipeline - financed by a $1.2 billion Chinese loan - until they get a bigger share of the benefits from gas development.
Tanzania's deputy home affairs minister, Pereira Silima, said riots had erupted in Mtwara but could not give details. Local media reported that police fired teargas, several buildings were torched and one person was killed.
The government first announced a plan for the pipeline last year. The riots took place shortly after Tanzania's energy and minerals minister, Sospeter Muhongo, presented his ministry's 2013/14 budget proposals in parliament including the pipeline project.
The riots forced the country's parliament to postpone debate on the budget proposals on Wednesday.
"Mtwara (residents) had planned to cause problems during the presentation of the budget proposals of the ministry of energy and minerals, and they have done so ... I am adjourning this parliament session until tomorrow," the speaker of the National Assembly, Anna Makinda, announced.
The state-run Tanzania Petroleum Development Corporation (TPDC) said Mtwara was one of two regions in southern Tanzania where onshore liquefied natural gas (LNG) plants will be built.
Norway's Statoil, Brazil's Petrobras, Royal Dutch Shell and Exxon Mobil Corp are among energy companies exploring for oil and gas in Tanzania.
British gas firm BG Group said earlier this month it would present the Tanzanian government with proposed locations for a big LNG terminal in the next few months.