Tanzania Tenders for LNG Consultancy Work

Tanzania is seeking a consultant to help it to negotiate terms with five international gas companies interested in building a liquefied natural gas export facility on the southeast coast at Lindi.

The Tanzania Petroleum Development Corporation (TPDC), the government’s lead agency in the negotiations, published an advert April 12 for the transaction advisor for the long-awaited $30bn plant. Singapore Pavilion, UK Ophir and Anglo-Dutch Shell have in one partnership found some 16 trillion ft³ offshore; while Norwegian Statoil and US ExxonMobil have elsewhere together found another 23 trillion ft³.

All have been in talks about building a plant to be built onshore at Lindi on the coast. As a rule of thumb, 1 trillion ft³ could support a 1mn metric tons/year LNG plant for 20 years' output, so the upper limit on output capacity is very high.

But despite the amount of gas involved, negotiations for a host government agreement (HGA) have been slow, in part because of an unstable regulatory environment and the government's interference in the extractive sector, under its president John Magufuli. 

In its latest report released early April, London-based consultancy Business Monitor International (BMI) echoed the views of other think tanks and gas companies in raising concern over two laws that were enacted in June 2017 that empower the government to renegotiate existing contracts.  BMI said the LNG project, to process some of the 57 trillion ft³ gas available onshore and offshore in the east African country, is unlikely to be up and running before 2027.

TPDC said the country received a loan from the African Development Bank to help it develop its natural resources on a legally acceptable and transparent basis. The government intends to use part of the financing to pay the consultant who will work on a two-year contract.

The advisor will assist the government's negotiating team to develop a workable commercial, legal and technical framework for the LNG project; build capacity in the negotiating team, and develop the best approach to undertake negotiations.