Tanzania: Samia clears path to 2023 launch of Shell, Equinor gas facility

By David Whitehouse

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Posted on February 4, 2022 15:19

COP26 in Glasgow
Samia Suluhu Hassan, President of Tanzania, speaks during the UN Climate Change Conference (COP26) in Glasgow, Scotland, Britain, November 2, 2021. REUTERS/Hannah McKay/Pool

President Samia Suluhu Hassan is turning a page on the Magufuli regime and moving forward with talks on the development of the country’s natural gas reserves. Both Shell and Equinor are looking at 2023 as the start date for construction of new projects.

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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