Tanzania LNG Project Talks Drag On

Posted on : Thursday , 17th February 2022

Tanzania is moving cautiously in its lucrative natural gas deals with no end in sight of the Host Government Agreement (HGA) negotiations, which resumed recently but are set to take longer than expected.

Fresh discussions on the HGA over the multibillion-dollar project are being held in Arusha, northern Tanzania, after the negotiating teams finalised preliminary talks in November 2021.

After being in limbo for nearly 2 years, preliminary discussions on the HGA resumed in November 2021 with assurances from the new Minister of Energy January Makamba.

In November 2021, while opening a fresh HGA discussions, Mr Makamba told stakeholders that the government was committed to having the Liquefied Natural Gas (LNG) project implemented.

The negotiations are expected to proceed by discussing every stage of the project. The discussions will also address the nature of Tanzania Petroleum Development Corporation participation, fiscal framework, including tax exemptions, stability of terms and local content.

“The discussions with the government are vital in co-creating a stable fiscal, legal and regulatory framework to enable a global competitive project and further investments by the LNG investors,” said Ola Morten Aanestad, spokesperson of International Upstream.

Fedister Agrey, the LNG project manager at the Tanzania Petroleum Development Corporation, said the HGA negotiations are ongoing.

Meanwhile, Mozambique, which shares a border and gas reserves with Tanzania, last month received Africa’s first deep-sea floating LNG facility ahead of gas production from an offshore field. It has a capacity to liquefy 3.37 million tonnes of natural gas annually.