The Tanzanian government has arranged a draft agreement with international oil companies to collaborate in building a $30b liquefied natural gas (LNG) export project, All Africa reported.
According to Oil Price, the document has been sent to Energy and Minerals Minister, Sospeter Muhongo, so he can review its terms, which is considered the first step in framing the terms for the foreign companies in building and running the project.
State-run Tanzania Petroleum Development Corporation (TPDC) is collaborating with ExxonMobil, Statoil, Ophir, and Shell in developing an LNG project that would enable the country to export gas from its offshore resources.
Tanzania is competing with Mozambique to build the export plant, as it is considered the owner of East Africa’s biggest natural-gas reserves after Mozambique, with capacity of 57.25tcf.
Minister Muhongo stated, “We must beat Mozambique to secure markets in Japan and South Korea.”
According to the minister, the export terminal planned for Lindi region will be worthless if Mozambique’s LNG came first, as export contracts take between 15 to 20 years.
“Buyers would need to sign long-term contracts and this has a direct effect on the nation in case our competitor also targets the Asian market,” he added.