Tanzania LNG Project advances as energy firms and government conclude key negotiations

• International energy companies (IEC) announce the conclusion of negotiations with the Tanzanian government regarding the LNG project. 
• The anticipated signing of the Host Government Agreement (HGA) and production sharing agreement (PSA) is subject to the successful completion of the assurance process in the coming weeks. 
• The conclusion of negotiations marks a significant milestone in the implementation of the Tanzania LNG project, with further engineering design work to follow.

International Energy Companies (IEC), which are negotiating the LNG project with the Tanzanian government, claim that there has been progressing in the negotiations.

The energy firms (IEC) have finished discussions with the Tanzanian government, according to Jared Kuehl, Shell’s vice president and country chair for Tanzania. “The international energy companies involved in the Tanzania LNG opportunity are pleased that important negotiations with the government of Tanzania have concluded,” said Mr. Kuehl.

“Subject to successful completion of the assurance process over the coming weeks, we anticipate the signing of the Host Government Agreement (HGA) that covers the onshore elements of the project and a production sharing agreement (PSA) that oversees its upstream components,” he added.

Regarding the end of negotiations with the IEC, the Tanzanian government has not yet made an official announcement.

Mr. Kuehl asserts that the conclusion of the negotiations marks a significant turning point in the protracted process of implementing the Tanzania LNG project, with more extensive engineering design work coming next. “Equinor and Shell, as joint operators, are pleased with the steps forward and remain focused on working together with our partners,” he wrote.

ExxonMobil, MedcoEnergi, Pavilion Energy, TPDC, and the Tanzanian government are some of the partners. According to Tanzania’s lead negotiator Charles Sangweni, the agreement also addresses land usage and security. “We are happy it is a big step towards the implementation of the project although we have a lot to do. If everything goes well as planned, I am confident that the final investment decision will be reached in 2025,” Sangweni.

Towards the realization of its $30 billion liquefied natural gas (LNG) project, the government and a consortium made up of Shell, Exxon Mobil, Equinor, and Ophir Energy signed a first Host Government Agreement (HGA) in June 2022. This opened the door for further discussions.