Negotiations to develop a $42 billion liquefied natural gas export plant in Tanzania have been delayed by the government's proposed changes to a financial agreement agreed last year, a government spokesperson and two company officials said.
Last May, the government and investors announced they had completed negotiations on a long-delayed project to exploit Tanzania's vast offshore gas resources.
Equinor and Shell are joint venturers, and Exxon Mobil, Pavilion Energy, Medco Energy and Tanzania's national oil company TPDC are partners.
The government said at the time that the Cabinet would review the deal next month, but it has not yet been approved.
Government spokesperson Mobare Matini said Tanzania remained interested in working with investor groups.
“The proposed amendments to the host government agreement are aimed at ensuring a truly fair win-win for both sides in the overall agreement, and nothing else,” Martiny said in a statement to Reuters. '', but did not provide details of the proposed amendment.
“We hope to conclude the amendments soon so that our experts and officials can move forward with this important project.”
The amendment was proposed by Energy Minister Doto Biteko, who took office in August last year, one of the investors said. Mr Biteko will also serve as Deputy Prime Minister.
The proposal “completely blew away the economics of the project,” said the person, speaking on condition of anonymity. The official added that Mr Biteko told parliament last month that he expected the government to conclude the negotiations within the next financial year, but was “certainly optimistic”.
A second source at another investor agreed with the first source's explanation. Neither source provided further details on the proposed amendments.
A Department of Energy spokesperson did not respond to a request for comment.
A Shell spokesperson told Reuters that after entering into the agreements with the government, the company had “hoped that these agreements would have been signed sooner, but we remain competitive and in line with what we agreed last year.” “We stand ready to work with the government towards an investable agreement.” ”.
An Equinor spokesperson had no comment. Pavilion and Medico introduced Shell to Reuters. Exxon and TPDC did not respond to requests for comment.
(Reuters – Additional reporting by Aaron Ross in Nairobi, Nuzrak Dosen in Dar es Salaam, Emily Chow in Singapore and Francisca Nangoy in Jankarta; Writing by George Obrutsa; Editing by Aaron Ross and Emelia Sithole-Matarise)
