Investors see ‘imminent’ conclusion of Tanzania LNG talks

The talks were revived in 2021 after stalling for a long time, but the two sides have yet to conclude negotiations as they seek to strike a balance of the benefits.

However, investors expect the discussions to be concluded early this year and both parties are optimistic about reaching a favourable deal.

The project, which is expected to create over 1,000 jobs, including 500 permanent positions, has faced delays due to prolonged negotiations between the government and key investors.

Speaking during a visit to the proposed project site in Lindi Region on Friday, Norway’s Deputy Minister for Foreign Affairs, Mr Andreas Kravik, expressed his country’s desire to see the project proceed swiftly, citing its significant benefits for Tanzania and its citizens.

“This project is vital, not just for Lindi but for the entire nation where it will contribute to energy production, job creation and government revenue. Norway and Tanzania have long-standing relations, and we aim to strengthen them further through the venture,” said Mr Kravik.

He emphasised Norway’s commitment to supporting the project’s success and noted that proposals currently under discussion have the potential to satisfy all parties involved.

Investors optimistic

Equinor Tanzania’s country director, Ms Hilde Nafstad, whose company holds a significant stake in the project, expressed optimism about the negotiations, stating they are nearing completion and could conclude early this year.

“We need to strike a balance that benefits all parties. The proposals on the table now provide a fair outcome, and we are confident we will reach an agreement soon,” Ms Nafstad said.

She added that provisions have been made to ensure local financial institutions and insurance providers benefit from the project’s implementation.

According to some sources, use of local banks and local insurance companies has been one of the contentious areas.

The local content laws require the investors in the oil and gas industry to use the local financial institutions.

Shell Tanzania chairperson, Mr Menno Bax, echoed his fellow investor’s sentiment, attributing the lengthy discussions to the scale and complexity of the project.

“The global LNG market is enormous, and we’ve been working closely with the government to resolve the remaining issues. With the cooperation we’ve received, I am confident this project will commence shortly,” Mr Bax said.

Government confident

Speaking to Mwananchi newspaper, the Energy ministry Permanent Secretary, Mr Felchesmi Mramba, assured that the government is fully prepared for the project’s rollout, expressing greater optimism than even the investors.

“Tanzania has discovered over 57 trillion cubic feet of natural gas, with 47 trillion cubic feet allocated to the companies involved in the LNG project. Despite this substantial discovery, we are yet to fully benefit beyond electricity production,” said Mr Mramba.

“We are in the final stages of negotiations and anticipate positive outcomes. The government’s expectation is to see this project bring significant economic benefits, particularly in boosting foreign exchange earnings,” he added.

As part of his visit, Mr Kravik also toured other Norwegian-supported initiatives in Tanzania, including projects implemented by Norwegian Church Aid (NCA). The projects focus on economic empowerment and youth engagement in schools, highlighting Norway’s broader commitment to Tanzania’s development.