FINAL investment decision on the onshore liquefied natural gas (LNG) export terminal in Lindi Region is subject to the outcomes of negotiations between the government and investor on some legal aspects on deep sea gas exploration, Statoil Tanzania has dis-Statoil Head of Commercial department, Musa Makame unveiled this in Dar es Salaam over the weekend during a one day training to enlighten journalists on various issues concerning the oil and gas sector.
“Negotiations with the government started a year ago and there are ongoing discussions on monthly basis that will enable the company management to decide on continuing with the gas production project,” he said.
The project worth 30 billion US dollars and is expected to be completed in five years and enable gas availability for domestic use in various parts of the country and export.
Statoil Legal Officer, Edward Kateka said the discussion on legal matters is the outcome of new legislation enacted in July which allow the government to force mining and energy companies to renegotiate their contracts.
In the training facilitated by WWF Tanzania and Environment Media Agenda (EMA) and which involved journalists from various media outlets, Statoil also revealed that so far they have spent two billion dollars in the project since the commencement of their licence of operation in 2007.
Oil and Gas expert, Professor Richard Rwechungura said that despite the fact that the oil and gas exploration work has great risk of either getting gas or oil at 20 per cent while missing 80 per cent, Statoil made the difficult decision by investing billions in exploring for gas in the deep sea of the Indian Ocean in Lindi region, where their efforts paid off when they struck gas on block No. 2 which they now have a licence to operate.
Statoil, along with BG Group which has been acquired by Royal Dutch Shell, Exxon Mobil and Ophir Energy plan to build the onshore LNG export terminal in the southern Tanzanian town of Lindi in partnership with state-run Tanzania Petroleum Development Corp (TPDC) for commercial drilling of natural gas estimated to reach at least 57 trillion cubic feet.