Tanzania to conclude talks for delayed LNG project in September

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DAR ES SALAAM (Reuters) – 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 Ottøy, 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.

Reporting by Fumbuka Ng’wanakilala; Editing by Elias Biryabarema and Tom Hogue

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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