The November resumption of talks between Tanzania’s government and multinational corporates on plans to develop the country’s rich liquefied natural gas (LNG) reserves has triggered optimism that progress may finally be in sight. Royal Dutch Shell and Norwegian company Equinor have been planning to build an LNG terminal at Lindi in southern Tanzania since 2014.
However, progress was undermined by revised terms introduced by Tanzania’s 2015 Petroleum Act, the 2016 Finance Act, and a series of natural resources laws pushed through by the late president John Magufuli in 2017. These enabled the authorities to renegotiate previous production-sharing agreements in their favour and in terms that were less attractive for investors.
Political will
In March, Magufuli’s unexpected death altered the political context, with Samia Suluhu Hassan coming to power as the country’s first woman president. “With the political will of the current government […] I will not be surprised if they conclude a deal next year,” says Imani Muhingo, head of research and analytics at Orbis Securities in Dar es Salaam.
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