Arusha — THE government has welcomed the decision of a group of insurance companies in retaining business in the country and working on the oil and gas projects.

Speaking here on Saturday, Energy Minister January Makamba commended the Tanzania Energy Insurance Consortium that will insure the risks of large projects, such as the 30 billion-US-dollar Lindi's Liquefied Natural Gas (LNG) project.

"The huge prospects of the LNG project in Lindi necessitated the formation of this consortium, I'm glad that we were able to make this happen," he said.

Mr Makamba further assured the consortium which consists of 22 local insurers of maximum cooperation as they get down to business.

"Our doors are always open and to assert that, we will establish an LNG Project office," hinted the minister.

In the past, Oil and gas projects have been insured with foreign companies as local insurers could not meet mandatory capital requirements for individual insurance businesses.

Such an arrangement, will see the local insurers cushion the LNG project and other gas and oil projects from potential disasters.

Earlier on, Robert Kalegeya from Phoenix Assurance said the consortium entails at gathering reinsurance capacity for the consortium and set up a working framework aimed at marketing cooperation and benefits for the industry.

"This arrangement will guarantee a minimum of 45 per cent retention on the LNG project and knowledge transfer through attachment programmes whereby Tanzanian underwriters will have a chance to work with A rated reinsurer in oil and gas departments," he detailed.

The move, according to Mr Kalegeya will attract A rated reinsurers to invest in Tanzania, as has been the case in western, southern and northern parts of Africa due to similar big projects like LNG.

"It is high time for the Eastern part of Africa to reap the benefits of such projects," emphasised the local insurer.