Shell, Equinor to resume gas processing in Tanzania after two years of stalled negotiations

TANZANIA will soon start to reap from yet another natural resource – liquefied gas project – that had been stuck for some time following some unresolved economic issues between the investors and the regime of former President John Magufuli.

Early this week, a senior governent executive in Tanzania told SAUTI KUBWA that the negotiations to resolve the various issues surrounding the proposed $30 billion liquefied natural gas (NLG) project at Lindi would be completed by October this year.

Shell and Equinor have discovered about 50 trillion cubic feet of gas in offshore blocks 1, 2 and 4, but the negotiations have been on hold since 2019 as Magufuli’s regime claimed to be “still looking at better ways of benefitting from the gas project.”

Recently, Energy Minister Medard Kalemani told a gathering of stakeholders in Lindi region that the government wants negotiations with the project’s lead proponents — Norway’s Equinor and Anglo-Dutch supermajor Shell — to be completed in four months.

Earlier this month, the minister told parliament that construction of the Tanzania LNG facility is expected to begin in July 2023 and be completed by June 2028.

Speaking in Lindi, Kalemani said; “President Samia Suluhu Hassan said the plant should be constructed speedily and we have mobilized ourselves to implement her directive. The negotiations are geared to having the project implemented.”

He called on people in Lindi and the neighboring areas to ready themselves for the business opportunities that should arise from the Tanzania LNG scheme, stressing that, despite years of delays, Hassan’s government is confident the project will move ahead.

Kalemani has instructed state-owned Tanzania Petroleum Development Corporation (TPDC) management and stakeholders to immediately begin talks on marking the boundaries of the proposed project site.

SAUTI KUBWA learnt that the project will employ about 15,000 workers at peak construction and create 5,000 local jobs when the facility is up and running.

The Host Government Agreement (HGA) and fiscal agreements underpinning the LNG scheme would be finalized before the end of this year, 2021. And that some landowners in Lindi had been compensated to the tune of 5.71 billion shillings ($2.4 million).