Africa Oil & Gas: Tanzania says talks on liquefied gas project still in progress

Tanzania exploration activity map-mozambiqueminingpostTanzania government has said it is still holding discussions with investors on the planned Liquefied Natural Gas (LNG) plant even though Members of Tanzania Parliament (MPs) want a speedy conclusion to the negotiations, according to The Citizen report.

The Minister of Energy Dr. Medard Kalemani told the country parliament that the government had already set aside a significative amount which it is planning to spend on conducting pre-front-end engineering design (Pre-FEED) for Liquefied Natural Gas (LNG) plant as well as compensating people affected by the project during the 2018/19 financial year.

The LNG plant is planned for construction in Lindi.

“So far the evaluation of the project and selection of concepts on production and transportation of gas from the deep sea to the mainland have been completed”.

“We are now continuing with discussions on the Host Government Agreement (HGA). The actual project will start after completion of the discussions,” said Dr. Kalemani during the parliament session.

However, the parliamentary Energy and Minerals Committee called on the government to hasten discussions with investors on the development of the LNG plant to secure international markets which the team said were in danger of being lost to other countries that have invested in the same sector.

This comes at a time when neighboring Mozambique is reported to have secured financing for the development of its $20 billion LNG project.

International media outlets reported that Societe Generale, the financial adviser on the $20 billion Mozambique LNG project had already received the interest for a combined $12 billion in cover and direct lending from export credit agencies (ECAs) in China, South Africa, Italy and Japan.

Tanzania has a natural gas resource estimated at 57 trillion cubic feet (tcf) onshore and deep sea. The neihbouring Mozambique is reported to have discovered over 180 trillion cubic feet of natural gas.

International companies like Statoil and Shell are currently in discussions with the Government on the development of Tanzania $30 billion LNG project.

“The government must fats track the discussion process with investors”, said the committee chairman, Mr. Dunstan Kitandula who was presenting the team’s report on the ministry’s budgetary estimates for the next financial year.

The committee was also dissatisfied with the speed at which authorities were investing in the supply of natural gas for domestic use.

Earlier Kalemani said that already 70 houses had been connected with natural gas and 1000 others were expected to be introduced into the system in other areas of Dar es Salaam in the first phase of the project which was launched recently.source: the citizen




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