Tanzania will spend KES12bn in the next fiscal year to buy land for planned Liquefied Natural Gas (LNG) terminal plant. The two-train onshore LNG export terminal has faced obstacles due to difficulties in land acquisition procedures, and an uncertain legal and regulatory framework.
The terminal will be built in the small southern town of Lindi, located close to an offshore deep-sea region where huge natural gas discoveries have been made. The Government of Tanzania says the project could cost up to KES28.9bn ($30 billion) has run into delays mainly due to complex land acquisition procedures and an uncertain legal regulatory framework. The country is estimated to have more than 53.2million cubic meters of gas reserves off its Southern Coast.
British Gas Company BG Group, together with partners Statoil, Exxon Mobil and Ophir Energy, plans to build the LNG export terminal, expected to start operating in the early 2020s, but a final investment decision is only set for 2016.Moreover, Tanzania’s energy sector has been faced with graft allegations that have led to delays in passing the new gas bill thus derailing developments in the sector.
In recent years, East Africa has become the next big gas producing regions after huge discoveries as countries like Russia, Australia and Canada exploit ways of filling the gap of supplying energy.