![]() ![]() Gas is less polluting than coal, and, Bruce says, it will be “politically hard” for the West to tell poor, developing countries to keep their gas in the ground." Roadblock was an A level Technology project for Hender.Hender is a very able technology student who has been presented to HRH the Prince of Wales with his technology project." - Peter Kinsey LNG will have a role to play over the next 20 years, as base load will still have to come from somewhere during the energy transition, he adds. Nevertheless, there is no consensus, Bruce says, on whether LNG should be seen as a transition fuel, or just another fossil fuel. LNG also has the potential to stimulate industries such as fertilisers, chemicals, aluminum and plastics, the paper says. Still, the new presidency has not transformed Tanzania, and Hassan does have some “authoritarian tendencies”, he says.Īn academic paper led by Obadia Kyetuza Bishoge at Beijing’s University of Science and Technology argues that Tanzania’s LNG can reduce environmental pollution caused by the domestic use of charcoal and wood for fuel.Compared with the Magufuli era, it’s now “much less likely” that contracts will be renegotiated in an unfavourable way, Bruce says.Makamba, however, has shown himself to be a “vocal Magufuli critic”. Kalemani was seen as a “roadblock” and his relationship with oil companies was “pretty poor,” Bruce says. Hassan has removed Magufuli’s energy minister, Medard Kalemani, and replaced him with January Makamba. A more radical move, he adds, would be for the companies to design a scaled-down version of the project, which could drop, for example, the planned onshore liquefaction plant.Shell and Equinor, he adds, are likely to be pushing for better tax terms, and could also try to lower costs, for instance through a lower local content requirement.“Something still has to change to make the problem economically attractive,” Bruce says.At the time, the company said the project’s estimated breakeven price was well above Equinor’s $40 per barrel average portfolio breakeven.The economics may not stack up versus other possible investments, he says, pointing to Equinor’s decision to write down its $982m investment in the project at the start of 2021. However, even if an agreement is reached with the government, he says, it’s possible the companies still might not go ahead. The fact that dialogue has restarted is “very positive” and is an “important signpost,” Bruce says. READ MORE Nigeria's new petroleum law is forging a new trajectory for natural gas There are still big hurdles to overcome.” ![]() These, Bruce says, are “all potential sticking points. ![]() “The economics are difficult” for LNG as a greenfield project in Tanzania, which lacks developed infrastructure, says Roderick Bruce, associate director at IHS Markit in London.Ī host government agreement would need to cover fiscal terms, and the questions of domestic market supply and local content. The fact that it has not been developed since, hints at economic as well as political obstacles. The first discovery of Tanzanian natural gas was made in the Lindi region in 1974. “We expect stakeholders to fast-track negotiations and get the ball rolling.” There is currently a “favourable window of opportunity with mutual benefits for the government and foreign investors”, says Zaynab Mohamed, an analyst at Oxford Economics in Cape Town. “We are pleased with the energy and momentum brought by the government of Tanzania and look forward to having constructive discussions over the coming months.” The talks aim at establishing a “competitive and attractive project”, the statement says.
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