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Tanzania moves swiftly on natural gas exports

The government of Tanzania is moving forward with plans to invest in in the export of liquefied natural gas.

The government of Tanzania has completed a draft agreement that it hopes will seal a USD 30 billion investment into the export of liquefied natural gas (LNG).

The east African country is competing with Mozambique for foreign investors that will not only participate in the project, but assist the country to build and grow the industry.

According to the department of Energy and Minerals, the draft is expected to lay out an agreement through which construction will take place for a plant that would be capable of delivering 10 million tonnes of LNG annually.

Tanzania’s natural gas reserves sits at over 57 trillion cubic feet. The Tanzania Petroleum Development Corporation – a state-owned entity – has already partnered with Statoil, ExxonMobil, Ophir and Shell on the project, but, competition is stiff.

In 2014, more than USD 30 billion was pledged to Mozambique’s natural gas sector. The project equipped the coastal country to produce an estimated 20 million tonnes of LNG annually, with the first exports expected to ship in 2018.

Tanzanian authorities, arriving late to the LNG supply party, are now determined to secure markets in Japan and South Korea.  The challenge, however, is formidable. According to Tanzania Daily News, the Minister of Energy and Minerals said the LNG project would be worthless should Mozambique’s LNG come first. He cited export contracts as the biggest hurdle, estimating that one signed deal could lock in suppliers for between 15 to 20 years.

If Tanzania is able to gain lift on its LNG exports, the reward would make huge dents in the quality of life for its citizens. Government has previously said it would transform its energy sector and focus on using natural gas for domestic purposes.

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