| DAR ES SALAAM
DAR ES SALAAM Jan 29 Tanzania said on Friday it
had finalised a land acquisition for the site of a planned
liquefied natural gas (LNG) plant and was now working to
compensate and resettle villagers to move forward on a
Tanzania's natural gas reserves are estimated at more than
55 trillion cubic feet (tcf) and the central bank believes 2
percentage points would be added to annual economic growth of 7
percent simply by starting work on the huge plant that would
draw in billions of dollars of investment.
BG Group, being acquired by Royal Dutch Shell
, along with Statoil, Exxon Mobil and
Ophir Energy plan to build the onshore LNG export
terminal in partnership with the state-run Tanzania Petroleum
Development Corporation (TPDC). They aim to start it up in the
But their final investment decision has in part been held up
by delays in finalising issues related to the site.
"After securing the title deed, the law requires the owner
to pay compensation to the relevant parties based on a valuation
done by the chief government valuer," TPDC said in a statement.
TPDC now owns title deed for some 2,071.705 hectares of land
that have been set aside for the construction of the planned
two-train LNG terminal at Likong'o village in the southern
Tanzanian town of Lindi, which is located close to large
offshore gas finds.
Another 17,000 hectares of land around the site for the
proposed LNG terminal has been allocated for an industrial park.
The land was bought from large landowners and some
Tanzania's new president, John Magufuli, has promised more
urgency in decision-making, responding to a frequent complaint
from businesses. One example has been delays in finalising a
site for the multi-billion dollar LNG plant that will exploit
huge offshore gas finds.
Oil companies were unable to gain access to the site until
the land purchase, analysts say.
"The next key thing to watch is how quickly a host
government agreement is executed between the Tanzanian
government, TPDC and IOCs (international oil companies)," Ahmed
Salim, senior associate at consultancy Teneo Intelligence, said
in a note to clients.
East Africa is a new hotspot in hydrocarbon exploration
after substantial deposits of crude oil were found in Uganda and
major gas reserves discovered in Tanzania and Mozambique.
Mozambique's plans to build an LNG plant have moved more
swiftly. With other LNG projects moving ahead around the world,
the best deals for long term gas sales contracts will likely be
secured by those who come on stream first, analysts say.
(Reporting by Fumbuka Ng'wanakilala; Editing by Drazen Jorgic
and Mark Potter)