Tanzania Signs Initial Liquefied Natural Gas Framework Agreement

Tanzania has made history with the signing of the initial Host Government Agreement (HGA) for the country’s $30 billion liquefied natural gas (LNG) project. The agreement, which defines the fiscal, legal and commercial terms for the onshore components of the project, kickstarts negotiations for the development that will see Tanzania unlock its over 57 trillion cubic feet of gas reserves.

In the presence of H.E. Samia Suluhu Hassan, President of the Republic of Tanzania, the government – represented by H.E. January Makamba, Minister of Energy, Tanzania – and a consortium comprising global energy majors Shell, ExxonMobil, Equinor and Ophir Energy signed the framework agreement, kicking off negotiations for the $30 billion LNG project. With a final investment decision (FID) expected by 2025, the HGA will see the commencement of Front-End Engineering and Design for the project, which, following FID, would see development officially start. “Although Tanzania has several strategic projects such as the Julius Nyerere Hydropower Station and the Standard Gauge Railway…. LNG is very unique as it brings both capital and revenue,” stated President Hassan at the signing ceremony, adding that, “When completed, the project will change the country’s economic outlook, unlock the economic growth and capture benefits from LNG exporting to the global market. Therefore, I long to see phase two of the negotiations being timely wrapped up so that we pave the way for the projects’ implementation as planned later in 2025.”

Following the discovery of sizeable offshore gas reserves in 2010 and the consortium proposing an onshore liquefaction project in 2014, progress has been slow regarding project takeoff. Now, with the inauguration of H.E. President Hassan, who has placed the project as a top priority, efforts to fast-track development have already been seen. With the signing of the HGA, the government expects project operations to commence by 2029-2030, positioning the country as a global LNG exporter and highly competitive African gas economy.

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Written by Mercy ANURIKA

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