Dodoma — THE government has finally concluded talks with investors of a long awaited Liquefied Natural Gas (LNG) plant in Lindi Region, the National Assembly heard on Wednesday.
According to the Minister for Energy January Makamba, the agreements pertaining to the massive project will be presented to the cabinet for approval as required by law before the documents are signed.
Tabling 3.048tri/- budget estimates for his docket, Mr Makamba said that the project which will cost 42 billion US dollars (about 99tri/-) will change the image and economic sphere of the country.
“I’m pleased to inform the House that the talks for final Host Government Agreement (HGA) have been completed and its draft will be presented to the cabinet for approval,” Mr Makamba said.
The minister said the government has set a special office for LNG project, which will oversee effective implementation of the scheme.
He said other activities expected to be implemented in the next financial year include commencement of the preliminary preparations for the project, starting with conducting research including Front-End Engineering and Design (Pre-FEED).
Makamba added that the government will also continue to build capacity to government experts on operation and management of the project, and proceed with scientific research and familiarization of the machines which will be installed at the project site and conduct post – compensation livelihood study.
He noted that a total of 6bn/- has been set aside from internal sources for execution of the planned activities
“In the next meeting, the government will bring in the National Assembly a special bill for this project for enactment of a law, which will govern operations and execution of the agreements,” he said.
On the other hand, the government will in the next financial year start educating entrepreneurs on opportunities associated with the project and on how to exploit them.
“Special efforts will be done in order to enable residents in Lindi and Mtwara regions to understand their position and responsibilities in the project and on how they can take part and reap benefits,” Makamba said.
“As I have said earlier in order to ensure that local experts take part in the execution of the project the government will construct a technical college for the purpose in Lindi … the government will also collaborate with private sector to set Special Economic Zone in the project site in order to stimulate industrial development and increase employment opportunities,” he pointed out.
Elaborating, the minister noted that the Special Economic Zone will attract industries and other economic activities which will benefit from economic infrastructure including ports, and reliable electricity.
Debating the budget estimates, Singida- West MP Elibariki Kingu, (CCM) said that Minister Makamba will be remembered for reviving talks for LNG project which have been very successful.
“We want to see the results of this great work you have done…you should speed up the execution of this project to allow the country to move forward for wider interests of the nation,” he said.
Mchinga MP Salma Kikwete (CCM) said LNG project being located in Lindi municipality is crucial not only for the residents in the southern regions but also the country in general.
“I commend President Samia Suluhu Hassan for her determination to bring development in the southern regions because this project is going to improve the livelihood of the people,” she said.
Recently, the Director General of Petroleum Upstream Regulatory Authority (PURA), Eng Charles Sangweni, told ‘Daily News’ in a telephone interview that the government is currently drafting the final Host Government Agreement (HGA).
The initial HGA was signed between the government of Tanzania and investors involved in the mega project in June, last year, during a ceremony which was witnessed by President Samia Suluhu Hassan at Chamwino State House in Dodoma.
“We are now finalising the process of drafting the final HGA, these are legal documents and hence there is a need to have clear interpretation of all provisions of the agreement.
“If all goes as planned, we expect to sign the final HGA by February this year to pave the way for signing of the final investment decision by 2025,” Eng Sangweni explained.
Once the FID is inked in 2025, construction work for the project is expected to kick off in the same year after which production and exports of natural gas to global markets will start by 2030.
The initial HGA was signed between the government of Tanzania on one hand and investors of the project on the other. They include Shell and Equinor ASA companies, who are the main partners in implementation of the project.
Other investors who are partners of the multi-million project which is one of its kind in Tanzania include ExxonMobil and Pavilion Energy.