26 June 2018

Tanzania's Natural Gas Plant Construction to Start in 2022

Photo: The Citizen
Proposed liquefied natural gas plant (file photo).

Dodoma — Actual construction of a Liquefied Natural Gas (LNG) plant in Tanzania will start in 2022, the Energy minister said on Monday.

Dr Medard Kalemani told the Parliament that the government was doing well with its negotiations with multinational firms that are interested in the project and that actual construction would start in 2022.

Read more: Tanzania: Talks on liquefied gas project still in progress

He said currently, the firms were competing with each other regarding who should be the leader in the project execution.

"We met the investors recently and everything is progressing well... What is happening now is that the multinational firms are competing among themselves regarding which one should lead the project execution. By 2022, actual construction will start," he told the Parliament.

Dr Kalemani was one of the ministers who took turns to respond to views and queries, raised by Members of Parliament (MPs) during the six days of debating the government's Sh32.5 trillion budget proposal for the financial year 2018/19.

His updates on the LNG project was in apparent response to views raised by the Parliamentary Budget Committee which asked the government on Monday, June 18, 2018 to conduct a thorough analysis of the reasons behind a fall in natural gas exploration activities in Tanzania amid reports that some investors were contemplating to sell their stakes in the country.

Presenting the committee views on the 2018/19 budget, the body's chairperson, Ms Hawa Ghasia said reports that an American multinational, Exxon Mobile, was contemplating to sell its stake in Tanzania's natural gas industry was bad for the goal of setting up a Liquefied Natural Gas (LNG) plant in the country.

Earlier this month (June 2018), Exxon Mobile announced that it was seeking buyers for its stake in a large undeveloped gas field off Tanzania so it could focus on the development of an even bigger project in neighboring Mozambique.

Read more: Tanzanian lawmakers concerned as ExxonMobil plans to sell out of gas field

Exxon Mobil holds a 35 per cent stake in Tanzania's deep water Block 2 field. The company holds an estimated 23 trillion cubic feet (Tcf) of gas out of Tanzania's proven reserves of 55.08 Tcf.

Last year, the company also bought a 25 per cent stake in Mozambique's offshore gas-rich Area 4 development from Eni. Area 4 hold an estimated 85 Tcf and is one of the world's largest gas discoveries in recent years.

But Dr Kalemani said though it was true that Mozambique was making strides in the execution of its LNG project, it was also worth noting that Tanzania was not very far from realising the same dream.

"It is true that Mozambique is doing well but Tanzanians should also understand that we are not very far from that stage," he said.

The planned LNG plant will be put up at Ling'oko village in Lindi.

Apart from Exxon Mobile, others partners in the planned LNG project include: the government - through the Tanzania Petroleum Development Corporation (TPDC) - and BG/Shell, Statoil, Ophir as well as Pavilion.

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