Tanzanian minister: Tanzania will sign $42 billion mega LNG Project before June

A senior government minister said on Monday that Tanzania is expecting to sign a deal before June for its $42 billion project to build a liquefied gas plant. Production will begin in eight years.

Equinor & Shell are the joint operators for this mega-gas project. It aims to unlock 47.13 trillion cubic foot of natural gas reserves. Exxon Mobil, Pavilion Energy, Medco Energi, and Tanzania's National Oil Company TPDC, are also partners.

Proposed government changes to an agreement reached in financial 2023 slowed down the development.

Tanzania's LNG project, along with those in neighboring Mozambique could help establish East Africa as a hub for LNG exports to Asia.

"We've basically finished the commercial discussions." Kitila Mkumbo said that we are only discussing the legal framework for this agreement.

Mkumbo stated that a specific legal framework is needed because this $42 billion project was the largest investment ever for the country.

He said that the deal was done, and that he expected it to be signed by June. The project is expected to create over 100,000 jobs.

Mkumbo said that President Samia Suluhu Hassan also instructed the central banks to sell gold from their reserves.

We need cash. "We need cash. We have many infrastructure projects in progress that require funding. They have been told to sell a part of it so we can get the money needed for infrastructure."

On Monday, gold prices soared to record highs above $5,100 as investors sought refuge amid global?political tension.

Mkumbo made his comments after a number bilateral partners reviewed their financial support?following the unrest around last year's elections, which plunged Tanzania in its worst political crisis in decades.

Hassan has been declared the clear winner after the two main challengers to her were disqualified.

According to the?main opposition CHADEMA party and certain human rights activists, security forces have killed over 1,000 people during the unrest.

Hassan's government disputes this number, but hasn't put forward its own number for the dead.

Mkumbo stated that international partners, mostly European nations, withheld $2 to $3 billion from the $10 billion budget for development, including concessional loan and other budget supports, as a response to events.

(source: Reuters)