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TPDC draws strategies on LNG project pace

Wednesday April 07 2021
LNG pic

A liquefied natural gas plant. Tanzania plans to undertake a similar project at $30 billion in Lindi Region. Negotiations on the enterprise started in 2017. PHOTO | FILE

By Alfred Zacharia

Dar es Salaam. Tanzania Petroleum Development Corporation (TPDC) yesterday held a meeting to brainstorm and propose the best ways of implementing President Samia Suluhu Hassan’s directives over execution of the Liquefied Natural Gas (LNG) project.
Speaking at the swearing-in ceremony of the newly appointed permanent secretaries, their deputies and heads of public institutions at the Dar es Salaam State House yesterday, President Hassan directed the Ministry of Energy to swiftly finalise the ongoing negotiations so that execution of the multi-billion dollar project could start.
She wanted the ministry to evaluate why the project was not moving at the expected pace and identify those obstructing its progress.
“The LGN project is likely to become a National Anthem, because we have sung it for a long time now. It is time to know if the project is viable or not and understand who is blocking it,” she noted.
Those hindering its progress, she said, must be pushed aside.
“Don’t take long negotiations. If the existing investors are not willing, then you (ministry) must find others because they (investors) have a lot of projects they implement out there,” she said.
Ms Samia said that when she was the Vice President of Tanzania she tried to intervene, but her power was not enough to push the agenda successfully at the time.
TPDC’s managing director James Mataragio told The Citizen yesterday that he decided to call the emergency meeting with his staff to come up with the best ways of implementing the order.
“We (TPDC) have to think and discuss what to do. I will give the details of the meeting tomorrow (today),” he said over the phone.
Construction of the LNG, aiming to export the natural gas to the global markets, has been held up for years by regulatory delays.
Tanzania can start exporting its natural gas to global markets in the coming eight years.
In 2019 the government said it would conclude the Host Government Agreement (HGA) negotiations with international oil companies in September 2019 to start implementing the project in 2022.
The main implementers, Shelly and Equinor, said the construction of the project would take up to five years to completion.
LNG project manager Fedister Agrey told The Citizen yesterday that the HGAs negotiations were delayed due to commercial disputes between the government and the investors.
So far the government has paid compensation to 674 residents of Mbanja Ward in Lindi Region whose lands have been acquired for installation of the project and ordered them to leave the area.
A total of Sh5.2 billion have been disbursed to the residents who sacrificed a total of 2,077 square hectares, as compensation with interest to those whose payments were delayed.
Ms Agrey said the next step is to take conceptual designs and take various studies to figure out technical issues and estimate rough investment cost before the start of Engineering, Procurement and Construction (EPC).
“As we are still waiting for the government to conclude the Host Government Agreement (HGA) negotiations with the international oil and gas companies, we plan to move the people out of the place and do preliminary works,” she said.
With a total investment of more than $30-billion (Sh69-trillion), the LNG plant we will be exporting at least 7.5 million tons of liquefied gas per year with 10 percent of the produced natural gas is for domestic uses.
The lifespan of the LNG plant is 30 years once it becomes operational.

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