Oil and Gas

Final investment decision on Tanzania LNG plant still 5 yrs away -Statoil

DAR ES SALAAM, Nov 16 (Reuters) - The final investment decision on a Tanzania’s $30 billion onshore liquefied natural gas (LNG) export terminal will not be made for at least five years and possibly much longer, said Oystein Michelsen, Statoil’s Tanzania country manager.

“We are prepared for the project to take a long time, but we could bring it forward if the government is ready,” he told Reuters on the sidelines of an investment conference in Tanzania.

“We are not schedule-bound ... if the government delivers we would need five years until an FID,” he said, referring to a final investment decision.

It would take another five years after the decision to build the plant, he said.

Tanzania’s natural gas reserves are estimated at more than 55 trillion cubic feet (tcf) and the central bank believes starting work on the plant would add another 2 percentage points to annual economic growth of 7 percent.

The government is keen to promote the project but there has been little public discussion of the timeline.

Outstanding issues included a stable framework with the host government, and clarity over local ownership requirements in some contracts, Oystein said.

In August, Tanzanian president John Magufuli ordered officials to speed up long-delayed work on the plant, a project involving BG Group -- recently acquired by Royal Dutch Shell -- and Statoil, Exxon Mobil and Ophir Energy , in partnership with the state-run Tanzania Petroleum Development Corporation (TPDC).

A statement from Magufuli’s office said he wanted the remaining issues sorted out so construction could begin immediately.

Magufuli, a reformist who took office in November, has sacked several senior officials for graft or inefficiency. (Editing by David Evans)