Plans are underway by the International oil companies engaged in the construction for the establishment of a commercial framework for the $30Bn liquefied natural gas (LNG) according to media reports.
The framework is projected to define and compare alternative commercial and financial arrangements of both government and the private sector in a bid to address the unique attributes of the project.
It basically outlines the rights and obligations between the government and the investors in the process of executing major projects such as the LNG one.
BG Tanzania external relations manager Patricia Mhondo spoke on the issue saying that the companies have done groundwork to establish the LNG commercial framework. He further added that they are currently awaiting government response on the same.
Reports show that the government announced it will conduct an environmental impact assessment (EIA) at Likong’o Village in Lindi Region where LNG Plant is to be built. Tanzania has found at least 55t cubic feet of natural gas reserves.
Analysts are hopeful that the project is viable and that it will result into a number of opportunities for opportunities to Tanzanians and investors alike.
Until 2014, it was estimated that the development of the LNG plant would create over 10,000 new direct jobs and thousands more indirectly.
It would also enable the country to collect billions in taxes which will help among other things, to service the national debt and fund healthcare and education.
However, according to Repoa strategic research director Abel Kinyondo, the plant can only contribute so much.
He elaborated further adding that when the gas is fully exploited it will contribute to only 6% to the gross domestic product. Moreover, this also dependent on its connectedness to other sectors.