Tanzania is looking forward to signing for a $30 billion Liquefied Natural Gas (LNG) project within six months after the country’s president Samia Suluhu Hassan called for a resumption of negotiations that had stalled for more than a year.
The Liquefied Natural Gas (LNG) project is expected to add another 2% points to the annual economic growth of around 7%. It will also have the capacity to produce 10 million tonnes of liquefied natural gas every year. This will thus add 10% gas to Tanzania’s domestic use. The construction of the project is set to start in 2022.
In 2019, Tanzania’s Liquefied Natural Gas (LNG) project was put on hold after the suspension of talks between the government and foreign investors seeking to review the sharing agreements. The discussions were suspended due to concerns of massive tax evasion, unfair contracts, and manipulation by companies to decrease payments to the government.
However, Under the current government, president Samia Suluhu Hassan told lawmakers last week the talks over the LNG plant had dragged on too long and pledged to finish them speedily so the project can be implemented.
“The government’s negotiation team has already been formed ahead of the resumption of talks and we will be preparing from next week to restart negotiations with the investors as soon as possible,” James Mataragio, managing director of the Tanzania Petroleum Development Corp.
One of the developers, Equinor ASA, took a $982 million impairment on the project in January, which it said would be reversible, after failing to settle terms with Tanzania’s government.
Investor sentiment over Tanzania soured after the administration of former President John Magufuli overhauled mining legislation and ordered contracts renegotiated afresh.
Plans for a plant on Tanzania’s southern coast connected to offshore fields by pipeline have been under proposal since 2014.