TANZANIA COMPLETES FIRST DRAFT OF HOST GOVT AGREEMENT FOR MULTI-BILLION USD LNG PROJECT

DAR ES-SALAAM, Tanzania, which has East Africa's biggest reserves of natural gas after Mozambique, has completed the first draft of the host government agreement, setting out terms upon which foreign investors will build and run a multi-billion-dollar liquefied natural gas (LNG) project in the country.

Ministry of Energy and Minerals Acting Permanent Secretary Professor James Mdole said here Wednesday that the document had been submitted to the Minister, Prof Sospeter Muhongo, for review and additional input. This is a draft document which will establish a hosting government agreement, a key component towards constructing a proposed 10 million tonnes per year LNG plant.

Tanzania, with natural gas reserves of 57.25 trillion cubic feet, is racing with Mozambique to build an LNG export plant. The state-owned Tanzania Petroleum Development Corporation (TPDC) is partnering with Statoil, ExxonMobil, Ophir and Shell on the development of the project which will enable Tanzania to export its offshore gas.

Energy Minister Prof Muhongo said the government would engage with private experts in the oil and gas industry before meeting international oil companies planning to invest in LNG project. We must beat Mozambique to secure markets in Japan and South Korea, Prof Muhongo said through a teleconference call linking Dodoma, Mwanza and Dar es Salaam last week.

According to the Minister, the export terminal planned for the Lindi region in the southeastern coirner of the country would be worthless should Mozambique's LNG come onstream first as export contracts last between 15 and 20 years. Buyers would need to sign long-term contracts and this has a direct effect to the nation in case our competitor also targets the Asian market, he said.

Prof Muhongo said the government was committed to transforming its energy sector and improving the livelihood of its people. He said plans were ongoing to increase the supply of natural gas for domestic use as it was not only cheaper than other energy sources but was also environment friendly.

Source: NAM NEWS NETWORK