IN a significant development, Tanzania’s government announced on Wednesday that it had successfully concluded negotiations with the investors of its long-awaited liquefied natural gas (LNG) project, valued at $42bn. The agreements reached will now undergo review and approval, slated to be presented to cabinet next month.
Energy Minister January Makamba said the approval for the much-delayed project, which aims to tap into the country’s vast offshore gas resources, would require the cabinet’s endorsement before the final signing. While no specific timeline was provided during Makamba’s address to parliament, the Ministry of Energy’s budget speech for 2023/24, available on its website, indicated that the LNG investors and the government are expected to sign an amended production sharing agreement in June.
‘The $42 billion project will change the image and the face of our economy,’ declared Minister Makamba, emphasising that the government would enact a dedicated law to oversee the project.
Earlier this month, Equinor, Shell, and Exxon Mobil announced an agreement with Tanzania for the development of an LNG export terminal. President Samia Suluhu Hassan, who assumed office in 2021, has been actively driving the completion of long-delayed projects, with the LNG initiative facing a seven-year delay.
Minister Makamba also disclosed that the government plans to boost electricity production from the current capacity of 1,872 megawatts (MW) to 5,810 MW by 2025/26 to meet rising demand. He noted that this expansion would consider ongoing energy projects from various sources, placing great emphasis on the involvement of the private sector.
The pending approval and subsequent implementation of the LNG project hold immense promise for Tanzania, with the potential to revolutionise its economy and energy sector.