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Tanzanian LNG job delayed as government seeks to alter terms, sources state

Settlements for the advancement of Tanzania's $42 billion melted gas export plant have been postponed by proposed government modifications to a financial agreement reached in 2015, 2 sources from companies associated with the task stated.

The federal government and investors revealed last May they had completed negotiations on the long-delayed job to unlock Tanzania's large offshore gas resources.

Equinor and Shell are joint operators while Exxon Mobil, Pavilion Energy, Medco Energi and Tanzania's national oil business TPDC are partners.

The federal government said at the time that the cabinet would evaluate the contracts the following month. After months without an upgrade, Energy Minister Doto Biteko told parliament last month that the chief law officer and other federal government institutions had provided feedback on the offers and negotiations were anticipated to conclude during the 2024/25 .

A source from among the financiers said the delay associated to changes that Biteko proposed to the host government agreement after he became energy minister last August. Biteko also serves as deputy prime minister.

The source, who asked not to be identified, stated Biteko and his group came back to investors with a rather interesting amendment to the HGA which completely blew the project economics out of the water.

The source did not supply details about the modification, however stated that advancing on the job would be definitely not quick which Biteko's talk of completing negotiations in the coming fiscal year was definitely positive.

A second source from another investor agreed with the first source's account.

Tanzanian government representative Mobhare Matinyi and an energy ministry representative did not immediately respond to ask for comment.

A Shell spokesperson informed that after initialling the handle the federal government, the business had wished to see these contracts signed faster, however we stay prepared to continue to work with the government on competitive and investable agreements, consistent with what we concurred in 2015.

A representative for Equinor had no comment. Structure and Medico referred to Shell. Exxon and TPDC did not right away react to requests for remark.

(source: Reuters)