TANZANIA has temporarily suspended negotiations over Host Government Agreements (HGAs) with international oil companies for development of liquefied natural gas (LNG) project pending review of Production Sharing Agreements with oil firms.
Tanzania Petroleum Development Corporation (TPDC) Managing Director Dr James Mataragio said in Dar es Salaam yesterday that the government wanted to harmonise the HGAs with existing production sharing agreements (PSAs), which allowed foreign oil firms to undertake exploration, development and production activities in oil and gas industry.
“We have temporarily suspended HGAs negotiations pending completion of PSA review. We thought that it makes sense to finish PSA review before continuing with HGAs,” he told the ‘Daily News’ on the sideline of the third oil and gas congress.
Tanzania is expecting to add 5.2 trillion cubic feet of natural gas to raise estimates reserves of natural gas to over 62 trillion cubic feet. A consortium of international oil companies are expected to start building a longdelayed LNG project in 2022, the Minister of Energy, Dr Medard Kalemani told the national assembly in Dodoma last May.
Equinor, alongside Royal Dutch Shell, Exxon Mobil and Ophir Energy and Pavilion Energy, plan to build the onshore LNG plant in Lindi region.
Dr Mataragio said there were some issues that came up during the review of the existing PSAs that made a complete review necessary prior to continuing with the HGA negotiations with international oil firms that have expressed interest to investin the LNG project.
He, however, would not go into details on the issues but noted that the temporary suspension will not take long as for the time being the review of the agreements was in final stages.
“It won’t take long because for the time being they are wrapping up the (PSA) review,” he said.
“There are some issues which need to be resolved but without going into details, we hope to wrap up the review any time from now.”