- Aug 2, 2010
The Tanzanian government is considering constructing a liquefied natural gas (LNG) in Kilwa region even as international oil companies are still seeking a suitable location.
While the government is seeking to have the plant constructed offshore, the companies want the plant to be onshore to allow for easier access. The companies had earlier requested that the plant be in either Mtwara or Lindi regions where abundant gas has been discovered.
According to British Gas Tanzania's head of policy and corporate affairs Fred Kibodya, the feasibility study that has just been concluded shortlisted at least 10 locations that the companies are still looking at before deciding on a favourable position that will enable easier access and transportation of the product.
"These 10 locations including Kilwa were shortlisted in the first survey, but if they are found to be unfavourable, we will look elsewhere," he said.
Energy and Minerals, Deputy Minister Stephen Masele said that initially the International Oil Companies including Exom Mobil, British Gas and Statoil had earlier proposed that the plant constructed onshore but the government wants it offshore.
"After we conducted a feasibility study the appropriate place for the construction of the LNG plant was seen to be Kilwa, although it's still under consideration" he said. However he noted that a pre-feasibility study that was being conducted that could change the location.
The deputy minister said that the country had discovered at least 50.5 trillion cubic feet of gas both offshore and onshore and therefore it was imperative to have an LNG plant. The International Oil Companies were developing a plan on the project before submitting it to the government for review.
According to Mr Masele, after going through the development plan and agreeing with it, the government will embark on legal matters including compensation to pave way for the construction.
"The initial estimate for constructing the plant is between $15 billion and $20 billion, but actual costs will be known during construction," Mr Masele said.
He said that another government plan is to have the LNG plant adjacent to the petrochemical complex that will be constructed by the state and managed by the Petroleum Development Corporation.
Mr Masele was talking to The EastAfrican a few minutes after opening a two-day Tanzania Oil and Gas Conference and Exhibition with the theme, "Development of the oil and gas sector for the benefit of the public".
Earlier the Energy Ministry's Deputy Permanent Secretary Ngosi Mwihara said that the government has put in place a policy to manage and develop the natural gas sector that will ensure the public benefits.
The government was in the final stages of preparing the Local Content Policy which had been expected to be ready by June 2014. "The first draft was expected to have been finalised in June this year but due to a few hiccups, was moved forward," he said.