Tanzania to Conclude Talks for Delayed LNG Project in September

Source: Reuters 3/23/2019, Location: Africa

Tanzania says it plans to conclude talks in September with a group of foreign oil and gas companies led by Norway’s Equinor on developing a liquefied natural gas (LNG) project in the East African country.

Construction of an LNG export terminal near huge offshore natural gas discoveries in deepwater south of the country has been held up for years by regulatory delays.

“The government has officially decided to begin talks in early April for construction of the LNG project,” Tanzania’s energy ministry said in a statement issued late on Friday.

“We are keen to implement this key project for the economy and we plan to conclude the talks in September this year,” the ministry said.

The country’s central bank believes just starting work on the plant would add another 2 percentage points to annual economic growth of around 7 percent.

The talks are aimed at negotiating a host government agreement, which is seen as a crucial step towards reaching a final investment decision for the long-delayed project.

The decision to speed up the talks was reached following a meeting on Friday between the African country’s energy minister, Medard Kalemani, and Mette Ottoy, a senior vice president at Equinor, who is also the company’s country manager in Tanzania.

Equinor, alongside Royal Dutch Shell, Exxon Mobil and Ophir Energy, plan to build a $30 billion onshore LNG plant.

The firms plan to develop the project in partnership with the state-run Tanzania Petroleum Development Corporation (TPDC). Tanzania invited bids in April 2018 for consultancy services to help the government conclude negotiations for the host government agreement.

Tanzania has estimated recoverable reserves of over 57 trillion cubic feet (tcf) of natural gas. Tanzania President John Magufuli wants to speed up negotiations to set the commercial and fiscal framework for the LNG terminal development to boost revenues to finance other infrastructure projects.


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