Tanzania’s Liquefied Natural Gas (LNG) project has, yet again, been put on hold. This follows the suspension of talks between the government and foreign investors that seek 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.
Since all existing gas contracts need to be reviewed, the government decided to suspend negotiations for a little while. This will allow for smooth co-ordination between Production Sharing Agreements (PSAs) review and negotiations.Felix Nanguka, Tanzania Petroleum Development Corporation LNG Project Manager
The Tanzania LNG Project is a planned liquefied natural gas processing plant in Tanzania. International oil companies such as Equinor, Royal Dutch Shell, Exxon Mobil, Ophir Energy and Pavilion Energy plan to build the project.
This will be in partnership with the state-run Tanzania Petroleum Development Corporation (TPDC).
The $30 billion is projected to add another 2%points to 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. Construction of the project is set to start in 2022.