Tanzania hopes new legal advisor will assist with signing of HGA on LNG project
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Tanzania's government remains eager to sign a host government agreement (HGA) on the Tanzania LNG project by April and hopes that the hiring of a legal advisor will help move the deal forward, Energy Minister January Makamba said on January 25.
Makamba was making an announcement on the retention of Baker Botts, a prominent US law firm, as legal advisor for talks on the LNG project. Speaking in the city of Arusha, he noted that the London office of Baker Botts had just signed a deal with Tanzania Petroleum Development Corp. (TPDC), the national oil company (NOC).
He did not disclose the terms of the agreement. However, Makamba did indicate that the law firm would advise TPDC on the technical, legal and commercial aspects of the proposed HGA.
Tanzania's government began discussing the Tanzania LNG scheme with Shell (UK) and Equinor (Norway) more than seven years ago. However, the project has run far behind schedule; partly because of commercial disputes between the companies and the government, partly because Tanzanian President Samia Suluhu Hassan's predecessor, John Magufuli, made the East Africa Crude Oil Pipeline (EACOP) project a higher priority.
However, Suluhu and her administration have been working to restart talks on Tanzania LNG, and Makamba confirmed last November that negotiations were once again underway with Equinor and Shell. Meanwhile, state-owned TPDC said it hoped to see work on Tanzania LNG begin in 2023 and finish in 2028.
According to previous reports, the scheme will involve constructing a gas liquefaction plant at Lindi, in the southern part of the country. This facility will handle output from three deepwater offshore sites containing about 35 trillion cubic feet (991bn cubic metres) of gas - Block 2, assigned to Equinor, and Blocks 1 and 4, assigned to Shell. It will have two production trains with a capacity of 5mn tonnes per year (tpy) each. The total cost of the project may reach $30bn.