Dodoma – Tanzania’s planned $42 billion Liquefied Natural Gas (LNG) project has entered the final stage of legal negotiations, with the government expecting the remaining agreements to be completed in the coming months before implementation begins, the Tanzania Petroleum Development Corporation (TPDC) has said.
TPDC Managing Director Mussa Makame said the government had completed most of the commercial and fiscal negotiations for the long-awaited project, leaving legal arrangements as the main outstanding issue.
Speaking to journalists in Dodoma, Makame said legal negotiation teams were currently meeting in Arusha to finalise the framework that will govern the implementation of the project.
“The project was for a long time at the stage of completing negotiations, but I would like to say that in the financial year that has ended, we completed a large part of the negotiations,” Makame said.
He said the completed discussions covered how the project would operate commercially, its size, taxation and how revenues would be shared among the parties.
“One thing that remains is the laws that will govern the implementation of this project. As we speak, the legal negotiation teams are meeting in Arusha. We expect that this will be completed in the coming months,” he said.
Makame said once the legal negotiations were concluded, the agreements would be submitted for approval within the government, followed by the necessary legislative process in Parliament before the project moves into implementation.
The development comes after the government told Parliament in April that commercial and fiscal negotiations for the LNG project had already been substantially agreed upon, with other legal processes remaining before the agreements could be signed.
The proposed LNG project is expected to attract approximately $42 billion in investment and operate for at least 35 years. Tanzania has estimated natural gas reserves of about 57 trillion cubic feet, making the project one of the country’s largest planned energy investments.
The project has been under development for more than a decade. In June 2022, the government signed a framework agreement with energy companies Equinor and Shell, setting out the rights and obligations of the parties involved in the planned investment.
Despite the agreement, the completion of the final project agreements has taken longer than initially anticipated.
Makame said the project will involve both offshore gas production and the development of facilities required to process and export the gas.
“The project has two sides. There is the offshore side, where gas will be produced from Blocks 1, 2 and 4, where the government, through TPDC, is working with five international energy companies,” he said.
He named the companies as Shell, ExxonMobil, Equinor, Medco and Pavilion, which are involved in the development of the offshore gas resources.
“The gas has already been discovered,” Makame said.
Once operational, the project is expected to significantly increase the availability of natural gas for domestic use while also providing substantial volumes for export.
Beyond the investment and export revenues, the government is also focusing on how Tanzanians can participate directly in the project and benefit from the economic opportunities it is expected to generate.
Makame said the Prime Minister’s Office had established a team to develop a local content strategy and plan for the LNG project.
The strategy is expected to identify areas where Tanzanian companies, professionals and other local actors can participate and outline measures needed to prepare them for those opportunities.
“Let me provide this information: the Prime Minister’s Office has formed a team that is developing a plan for the participation of Tanzanians, that is, a local content strategy and plan,” Makame said.
“We expect that after some time we will receive feedback showing the areas in which Tanzanians can participate and how they will be prepared to participate, so that it is not simply a matter of having discovered gas, but that Tanzanians also obtain direct benefits from the implementation of the project,” he said.
