oil and gas

Tanzania, investors begin talks on gas production

November 7, 2021

Negotiations between Tanzania and international oil companies on the stalled liquefied natural gas (LNG) project are set to start after teams from both sides met in Arusha last week.

This follows President Samia Suluhu’s push for the project and finalised review of the Production Sharing Agreement (PSA) arrangements.

“The LNG investors have been notified of the meeting on November 8 by the government,” said Ola Morten Aanestad, spokesperson of International Upstream.

Tanzania Petroleum Development Corporation (TPDC) Project Manager Fedister Agrey confirmed the meeting saying the government had done the relevant preparations and planned to hold discussions with the investors this month. “Tanzania will invest in the project according to participation percentage that is described within the PSAs,” she said

It has been six years since Tanzania started negotiations with these companies. The talks were often characterised by delays and postponements.

“LNG projects involve a lot of money and as a country we have our demands to investors. The prolonged talks were to ensure the country gets its fair share,” said officials from the Energy Ministry.

Oil and gas companies say there is hope to hold and finalise talks over the $30 billion LNG project.

“We see a window of opportunity for the Tanzania LNG project, and the ability to move efficiently to complete the discussions will create value for all partners involved and Tanzania as a country,” said Aanestad.

The Norwegian company in partnership with ExxonMobil, operates Block 2, which is estimated to hold more than 20 trillion cubic feet (0.6 trillion cubic metres) of gas. While Shell, operates Block 1 and Block 4, which are estimated to hold some 16 trillion cubic feet of recoverable gas, according to the company's website.

The discussions on Host Government Agreement (HGA) with a focus on fiscal, legal and regulatory frameworks of the project will have Tanzania obtain 10 percent of the liquefied natural gas while the rest (90 percent) goes for export.

theeastafrican



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