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Tanzania May Start Building $30 Billion LNG Project in 2023

President Samia Suluhu Hassan’s administration wants construction completed in 2028. Government negotiating terms with companies including Equinor.

Tanzania plans to begin the construction of a delayed $30 billion liquefied natural gas project in 2023, following the resumption of talks with companies including Equinor ASA.

Construction is expected to take about five years, Energy Minister Medard Kalemani told lawmakers on Thursday.

The project gained momentum after President Samia Suluhu Hassan took office in March, and directed her administration to fast-track delayed investments. Plans for an LNG plant on Tanzania’s southern coast and a pipeline connecting offshore fields have been under consideration since 2014. Talks, however, stalled for more than a year under Hassan’s predecessor John Magufuli.

The announcement on construction of the project comes months after Total SE suspended work on a similar plan in neighboring Mozambique following insurgent attacks. Tanzania’s project, which has lagged Mozambique, is set to benefit from Hassan’s push to boost investment and accelerate economic growth in a nation where policy uncertainty had stifled business.

Talks Resume
Hassan ordered the resumption of negotiations with the companies in May, about four months after Equinor’s decision to take a $982 million impairment on the project following failure to settle fiscal and commercial terms with Tanzania.

“We expect to conclude negotiations for a host government agreement and review production sharing agreements” by the end of June 2022, Kalemani said. The government has finalized compensation procedures with more than 600 residents of the southern Tanzanian town of Lindi to pave way for the project, he said.

Tanzania and the companies are discussing a proposed two-train onshore LNG plant to export gas from the East African nation. Other project partners include Royal Dutch Shell Plc, Exxon Mobil Corp., Sophi Energy Ltd. and Pavilion Energy Pte Ltd.

Separately, the government is building a pipeline network to connect and distribute gas to more than 10,000 homes and factories, mostly in the commercial hub of Dar es Salaam, Kalemani said.

Tanzania and Mozambique have for more than a decade been sub-Saharan Africa’s foremost gas frontier-investment destinations after explorers found more than 100 trillion cubic feet of the resources in their territories. Mozambique’s projects, with companies including Total, Eni SpA and Exxon Mobil and a projected investment of at least $60 billion, are threatened by an insurgency in the nation’s gas-rich regions.

More Info Tanzania May Start Building $30 Billion LNG Project in 2023

Tanzania signs host agreement for East African oil pipeline project

Tanzania has signed a Host Government Agreement (HGA) with a Total-led joint venture to launch the East African Crude Oil Pipeline Project (EACOP).

The EACOP project forms part of the wider $3.5bn Lake Albert resources development project in Uganda and Tanzania.

The signing of the HGA follows the final agreements made in April 2021 by Total and its partners.

These include shareholders agreement of EACOP and the tariff and transportation agreement between EACOP and the Lake Albert oil shippers.
The latest HGA establishes the legal and commercial framework for the project’s financing, construction, and operation.

Commenting on the project, Uganda President Yoweri Museveni said: “The pipeline is a very important regional project, Tanzania and Mozambique you have gas and the corridor can be used to take another pipeline for gas to help countries in the great lakes region with the resource.”

The EACOP project aims to connect the oil fields around Lake Albert in Uganda to supply up to 216,000 barrels of crude oil a day to Tanzania’s export terminal in Tanga.

Total, the government-owned Uganda National Oil Company (UNOC), Tanzania Petroleum Development Corporation (TPDC), and China’s CNOOC will be shareholders in the EACOP project.

The first oil export from the project is expected to take place in early 2025.

The oil pipeline will run from the future Kabaale Industrial Park in the Hoima district of Uganda to the Chongoleani peninsula near the Tanga Port in Tanzania.

The Lake Albert project also includes Tilenga and Kingfisher upstream oil projects in Uganda along with the construction of the EACOP in Uganda and Tanzania.

More Info Tanzania signs host agreement for East African oil pipeline project

Kenya and Tanzania ease cross-border business rules as relations thaw

Kenya and Tanzania ease cross-border business rules as relations thaw
By Reuters Staff

NAIROBI (Reuters)

Kenya will waive work and business permits for investors from its neighbour Tanzania, President Uhuru Kenyatta said on Wednesday, as his counterpart made similar overtures in a thawing of often frosty relations between the two countries.

Kenya, east Africa’s biggest economy and one of its most liberal, and Tanzania, which still imposes fairly tight capital controls and ranked No. 2, have long tussled for influence.

“We would like to see many investors from Tanzania coming to do business in Kenya. And I want to say this, Tanzanian investors are free to come and do business in Kenya without being required to have business visas or work permits,” Kenyatta said during a Kenya-Tanzania business meeting in Nairobi.

“The only thing you will be required to do is to follow the laid down regulations and the laws,” he told the meeting, attended by Tanzanian President Samia Suluhu Hassan.

Relations between the two neighbours have been at times testy and got worse under Tanzania’s late President John Magufuli, with officials at times trading barbs over trade restrictions, and last year, over COVID-19 compliance.

Hassan, was sworn in in March after Magufuli died, said her government had embarked on tax and other business reforms to make it easier for Kenyan investors to operate in Tanzania.

Hassan’s office said late on Tuesday the two governments had also pledged to speed up completion of electricity transmission and road construction projects Kenya and Tanzania are jointly carrying out.

The two governments also agreed to speed up groundwork for the construction of a natural gas pipeline linking Tanzania’s commercial capital Dar es Salaam and Kenya’s port city of Mombasa.

Reporting by George Obulutsa; Editing by Alison Williams.

More Info Kenya and Tanzania ease cross-border business rules as relations thaw

Solo Oil “encouraged” as Aminex reports Tanzania positivity

Jamie Ashcroft                                                                                                                                    25 Feb 2020

“We look forward to updating shareholders as we move to realise the core value of our Tanzanian assets alongside our partners,” said Solo chief Tom Reynolds.

Solo Oil PLC - Solo Oil “encouraged” as Aminex reports Tanzania positivity

Solo Oil PLC (LON:SOLO) chief executive Tom Reynolds said the AIM-quoted investment firm is “encouraged” by Tuesday’s update from Tanzania partner Aminex PLC (LON:AEX).

Aminex, in a separate statement, earlier today told investors that alongside partner APT it is teeing up their operations in Tanzania in anticipation of the ‘greenlight’ from regulatory authorities.

It highlighted that there are “positive indications” that Tanzania is re-engaging with the international business community, after a period of reduced corporate engagement, in order to  support the country’s power demands.

Aminex chief executive Tom Mackay said: “While we continue to engage in constructive dialogue, Aminex and APT are working diligently to progress workflows such that when the approvals are given, we can quickly move into an operational phase and deliver first gas from Ntorya and begin remediation work on Kiliwani.”

READ: Aminex teeing up operations ahead of Tanzania ‘greenlight’

“As of yet, no formal update has been received from the Government of Tanzania in regards to our licences, however we have had positive indications in-country that the government is approaching a place where it can update the international oil companies.”

Specifically, Aminex told investors that the joint venture partners will look to move contingent elements of the 2020 work programme into the firm budget. The Ntorya project has now progressed so that it can move to order long lead items, once there’s approval of the tendering and procurement process.

Solo retains a 25% beneficial interest in the Ruvuma PSA, which is host to Ntorya, and it has an 8.3918% interest in Aminex’s Kiliwani North-1 well.

Tom Reynolds, in Solo’s statement, said: “While this is no affirmative feedback from the Government of Tanzania, we are encouraged to see some positive developments as well as some progress between Aminex and APT.

“As announced towards the end of last year, our Tanzanian strategy is focused on high quality assets and stable cash flow, and we expect these discussions will further increase the likelihood of developing our assets to production.

“We look forward to updating shareholders as we move to realise the core value of our Tanzanian assets alongside our partners.”

More Info Solo Oil “encouraged” as Aminex reports Tanzania positivity

Tanzania and Barrick Gold Corporation Breakthrough

Fumbuka Ng’wanakilala, Reuters  /  24 January 2020

The government will take 16% stakes in Barrick mines.

It was signed by Barrick CEO Mark Bristow and Tanzanian minerals minister Doto Biteko at a ceremony in the commercial capital, Dar es Salaam.

It follows an announcement by the two sides in October in which they agreed to a payment of $300 million to settle outstanding tax and other disputes, the lifting of an export ban on concentrates and the sharing of future economic benefits from mines.

South Africa-born Bristow, describing the dispute as a “long safari” since it emerged in 2017, struck a conciliatory tone in a speech at the ceremony broadcast on state TV. Safari means “journey” in Swahili.

“Many people said your criticism will chase away investors … what it’s done is challenge the mining industry and all of us to embark on something where we win together or lose together,” Bristow said to applause.

Casting himself as a “Zulu boy” born in Zululand, Bristow called it a “historical day” for Africa.

“President, what I am here to do today is to offer you the hand of Barrick,” the CEO added, moving from the lectern to shake President John Magufuli’s hand.

The company said it had budgeted $50 million for brown and greenfield exploration in Tanzania in 2020.

“I thank God for the success of this agreement, said Magufuli, who has made a point of extracting more income from natural resources and described the negotiations as a clash between a cow and a rabbit.

He said confiscated containers of gold and copper concentrate could now be exported to the benefit of Twiga Minerals, a new joint venture set up to manage the Bulyanhulu, North Mara and Buzwagi mines.

“Twiga Minerals represents a structure which allows the government and the people of Tanzania to be involved in the decision-making of everything that we do together,” Bristow said.

Foreign Affairs Minister Palamagamba Kabudi, who led Tanzania’s negotiating team, said Tanzania now owns 16% undiluted shares in Twiga Minerals, as well as a 16% stake in each of the Barrick mines.

“We almost lost hope in the discussions with Barrick and I was ready to tender my resignation to the president for failing to complete this task, but we ultimately got the deal done,” Kabudi said.

The dispute originally involved Acacia Mining, which was bought out by Barrick. The government imposed a ban on exporting mineral concentrates in 2017 after accusing Acacia of tax evasion, leading to a one-third cut in the miner’s output.

Renegotiating all deals

Minerals make up the majority of Tanzania’s exports and are a key source of foreign exchange for Africa’s fourth-biggest gold producer.

The government said it is renegotiating mining agreements with all existing companies to get a minimum 16% stake in each large-scale mine, in accordance with mining laws passed in 2017.

Mining licences from now on will be issued by Tanzania’s Mining Commission under the guidance of the president, Kabudi said.

South African miner AngloGold Ashanti’s Geita is the largest gold mine in Tanzania. Other miners operating in the country include Shanta Gold and Petra Diamonds.

“It’s encouraging for all stakeholders in the mining industry that Tanzania and Barrick have formalised an agreement and have started a new chapter in the country,” said an AngloGold Ashanti spokesman.

“This deal is a sigh of relief not just for Barrick or the mining industry in Tanzania, but for investors in the broader region,” said Margarita Dimova, associate director at consulting firm Africa Practice.

A mining executive working in Tanzania said the agreement was positive for the sector: “A lot of key issues impacting projects getting off the ground were being pushed aside until the Barrick deal was sorted.”

More Info Tanzania and Barrick Gold Corp. Breakthrough

Tanzania again in trade deficit with Kenya

The Citizen Reporter                                                                                                               6 January 2020 

Dar es Salaam.

After recording trade surpluses for three consecutive years, the fall of exports has turned Tanzania’s trade with Kenya into a deficit.

According to Tanzania Revenue Authority (TRA) and Bank of Tanzania (BoT) computations, provisional data shows that Tanzanian trade with Kenya recorded a deficit of $35.8 million in 2018, down from a surplus of $90.2 million in 2017. The last trade deficit between Tanzania and Kenya was recorded in 2014, showing a deficit of $208.7 million before jumping into a surplus of $491.7 million in 2015! However, the trade surplus dropped to $46.1 million in 2016 due to a dramatic fall in exports to $313.8 million, down from $731.4 million in 2015.The computations also show that, in 2018, Tanzanian exports to Kenya were valued at $213.7 million, lower than the $291.5 million recorded in 2017. On the other hand, imports increased to $249.5 million in 2018, up from $201.3 million in 2017. The provisional data shows that, regionally, the trade balance between Tanzania and the other East African Community (EAC) states continued to remain on the surplus side for four consecutive years.

In 2018, Tanzania’s trade with EAC had a surplus of $141.8 million, lower than the $193.3 million surplus recorded in 2017. Tanzania’s trade deficit with the other EAC states was only recorded in 2014, at $108.3 million before jumping into a surplus of $581.7 million in 2015 – and $130.3 million in 2016. Kenya is currently the leading destination and major source of Tanzania’s intra-EAC exports and imports respectively – followed by Uganda. Tanzania’s major exports in the EAC region were beans, maize, sisal rope, tea and mosquito nets. Major imports were medicines and soaps. All in all, Tanzania has continued to record trade surpluses with the other EAC member states, including especially Uganda, Rwanda and Burundi.

According to the computations, the largest value in terms of a trade surplus in 2018 was recorded with Rwanda ($78.2 million), followed by Uganda ($52.6 million). Burundi was at the bottom, with a trade surplus of $46.8 million in favour of Tanzania.

More Info  Tanzania again in trade deficit with Kenya after four years of surplus

Gold exports from Tanzania rise 42% in the previous year

 

HIGHER pricing and an increase in volumes saw Tanzania’s earnings from gold exports rise 42% in the year to November, said Reuters.

Citing the east African country’s central bank, the newswire said gold exports rose to $2.14bn in the year to November from $1.51bn during the same period in 2018. Tanzania is Africa’s fourth-biggest gold producer after South Africa, Ghana and Mali.

“The increase in volume exported is partly associated with government actions to effectively manage mining activities in the country,” the bank said, without giving details on the volume exported. Total exports rose 12% year-on-year to $9.53bn in the year ending November, said Reuters.

The bank said earnings from tourism, another major foreign exchange earner, rose to $2.52bn in the year to November from $2.45bn in the same period a year earlier.

Tanzania’s minerals legislation has been altered in the last two years to allow for greater state equity participation as well as increases in levies and taxes. The Tanzanian government, led by President John Magaguli, has also recently emerged from a bruising conflict with the former Acacia Resources over unpaid tax allegations.

After having had a large portion of its gold production blocked by the Tanzanian government, Acacia Mining was eventually taken over by its majority shareholder Barrick Gold which has subsequently agreed a joint venture with the government.

More Info Gold exports from Tanzania rise 42% in year to November on the back of higher pricing

Natural gas: Africa could provide 20% of global needs by 2025

Théau Monnet                                                                                                                                  3 December 2019

After a relatively quiet decade, African natural gas exports have a bright future ahead, thanks in particular to the huge investments made in Mozambique. In its latest report, the African Energy Chamber provided an update on the major projects announced.

In its latest report on Africa’s energy outlook for 2020, the African Energy Chamber, an inter-professional grouping of energy and mining companies in Africa, focuses in particular on the export potential of African natural gas, whose exports in liquefied form will increase significantly.

The gigantic discoveries made over the past decade in Mozambique, Tanzania, Senegal and Mauritania have revealed a total of 200 trillion cubic feet (Tcf) of gas reserves, enough to supply two-thirds of current world demand for 20 years. In addition, there are 200Tcf of proven reserves in Nigeria.

  • In 2018 sub-Saharan Africa provided 10% of the global production of liquefied natural gas (LNG), equivalent to 28 million tonnes per year (mtpy).
  • Analyst Akap Energy forecasts that by 2025 this African production capacity will have increased by 150% to reach 84 mtpy.
  • That is 15 to 20% of the world market.

Such growth will depend on investment of more than $75bn, two-thirds of which will be injected into Mozambique.

This prospect is made possible by the fact that, after a decade in which there was a shortage of major investment projects, African gas is attracting new interest from international majors such as Total, ExxonMobil and Shell.

  • The main investments are concentrated on the east coast of the continent, due to the proximity of production areas to major Asian import markets, despite the high costs involved.

Floating liquefaction plants

The $50bn to be committed to Mozambican LNG between 2017 and 2025 by Exxon and Anadarko (currently being acquired by Total) is proof of this.

These LNG projects are also rapidly mobilising significant financing, such as the Senegalese-Mauritanian offshore gas field project at Grand Tortue, discovered in 2015, which could come on stream in 2020, the report says (but in 2022 according to our information) thanks to a $10bn investment from BP and Kosmos Energy.

Finally, while investments are less significant, countries with insufficient reserves to install onshore power plants, such as Cameroon, Ethiopia and Equatorial Guinea, are committing to the use of floating liquefaction plants, with production start-ups announced as early as 2020.

More Info Africa could provide 20% of global gas needs by 2025