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Conclusion of negotiations on LNG project in sight, says Tanzania
What you need to know:
- Once negotiations are complete, the final document will be submitted to the relevant authorities for approval, marking a significant milestone in the multi-billion-dollar energy project
Dar es Salaam. The government remains optimistic about finalising the Host Government Agreement (HGA) for its proposed liquefied natural gas (LNG) project before the end of the year, The Citizen has learnt.
Once negotiations are complete, the final document will be submitted to the relevant authorities for approval, marking a significant milestone in the multi-billion-dollar energy project.
Although President Samia Suluhu Hassan’s original directive aimed to conclude the HGA by December 2022, the process has been besieged by delays. The government and investors had hoped to proceed with preparatory steps such as the Pre-Front End Engineering Design (Pre-FEED) ahead of the Final Investment Decision (FID) in 2025, which would pave the way for production to commence.
Speaking to The Citizen, Deputy Prime Minister and Energy minister Doto Biteko confirmed that documents have been reviewed by government officials and returned with suggestions for improvement. These recommendations have been passed to the Government Negotiation Team (GNT) for finalisation.
“We have made necessary improvements based on feedback and these changes are currently under review by the GNT,” he said without revealing the areas that need to be worked on as suggested by the government.
GNT chair Charles Sangweni said the team has received feedback from the Attorney General’s Chambers and other government authorities that need to be considered before further negotiations with international energy companies (IECs) involved in the project can proceed.
The IECs, including Equinor and Shell, are the main stakeholders in the LNG project, which is provisionally valued at $30 billion (Sh70 trillion).
“We are now focused on aligning our positions on the issues where opinions differ,” Mr Sangweni said, adding that they aim to finalise negotiations as soon as possible and submit the agreement for the government’s final approval.
Equinor Tanzania communications leader Genevieve Kasanga reaffirmed the company’s commitment to moving the project forward, saying, "We continue to engage with our partners and the government of Tanzania to finalise the agreement. We look forward to concluding this step soon."
The HGA process has experienced several delays, including a recent review by the Attorney General’s Chambers, which sent the agreement back to the drawing board for further improvements.
Once finalised, the agreement will undergo vetting by the Attorney General’s Chambers before being forwarded to the Cabinet for approval, leading to the official signing of the agreement.
The LNG project, which will be implemented in Likong'o, Lindi Region, has seen its progress fluctuate over the years. In 2022, President Hassan witnessed the signing by the government, Shell and Equinor of a preliminary agreement for the project.
She said the project is not only of national importance but also strategic value in generating capital and revenue for the country. President Hassan has urged negotiators to safeguard Tanzania’s interests while balancing the need for flexibility in the discussions.
While the LNG project promises to bring significant economic benefits to the country, she stressed that the first beneficiaries should be residents of Lindi and Mtwara regions, with efforts made to enhance local participation and capacity building for Tanzanians.
The government's ongoing negotiations with international partners, alongside continuous legal and technical refinements, are seen as a critical step toward achieving the full potential of Tanzania’s LNG sector.
