Tanzania to Spend $6 mn on Land Acquisition for LNG Project

Tanzania plans to spend 12 billion shillings ($6 million) in the next fiscal year to buy land for the planned construction of a liquefied natural gas (LNG) terminal, reported news agency Reuters.

The LNG project, with an estimated cost of $30 billion, has been delayed due to complicated land acquisition procedure and uncertain regulatory framework. BG Group, together with partners Statoil, ExxonMobil and Ophir Energy, plan to build an LNG export terminal, expected to start operating in the early 2020s, but a final investment decision is only set for 2016.

“The government has set aside 12 billion shillings in 2015-16 (July-June) for assessment and compensation of 450 people ... where the (LNG) terminal will be built,” the government's planning commission said in a report seen by Reuters on Saturday. The terminal would be constructed in southern town of Lindi.

The East African nation has witnessed discovery of large amounts of natural gas in its offshore fields. Tanzania’s current proven reserves stand at close to 55 trillion cubic feet (tcf).

Recently, Tanzania set up a team of negotiators to represent the country in discussing all natural gas and oil contracts with international firms.