Tanzania's President Samia Suluhu Hassan is set to revive the long-stalled $30 billion liquefied natural gas development in Lindi, where energy giants Shell and Equinor are stakeholders.
Under the administration of former president John Magufuli, who died last month, the project was sidelined, with the presidency instead prioritising the East Africa Crude Oil Pipeline to take oil from Uganda to the Tanzanian port of Tanga.
“We have been singing the LNG song for a very long time," Hassan said. "I remember when I was sworn in as the vice president (in 2015), I tried to work on it, but discovered it was beyond me and stopped.”
However, according to the Citizen newspaper, she has now directed the Ministry of Energy to accelerate talks with project proponents Shell and Equinor.
Tanzania LNG would involve gas from Shell-operated blocks 1 and 4 and Equinor’s Block 2 being piped from deep-water subsea wells to two or three liquefaction trains at Lindi.
These blocks house about 35 trillion cubic feet of recoverable gas, split about evenly between the two operators’ assets.
The project is understood to have been languishing at the early engineering stage for years and, even if fiscal and legislative issues were resolved this year, it would be unlikely to come on stream before 2028.
Hassan’s position on Tanzania LNG and her appointment of Philip Mpango as vice president suggest the ruling Chama Cha Mapinduzi (CCM) party will be more business-friendly than it was under Magufuli.
Commenting on Mpango’s appointment, Thabit Jacob, a researcher at Denmark’s Roskilde University and a Tanzania expert, told Upstream the president “went for someone who is not strongly connected to any (CCM) faction... is seen as a neutral figure... is well respected... and doesn’t pose any political threat ahead of 2025", which is when the next election is due to be held.
Mpango, the former minister of finance, is also “well respected” by the likes of the International Monetary Fund and the World Bank, he said.
According to Jacob, Hassan appears to be “increasingly consulting” with Jakaya Kikwete, Tanzania’s president between 2005 and 2015 who had a pro-business stance while in office.
“There is a feeling within the CCM that (under Magufuli) they really messed up things with their very anti-private sector, anti-business rhetoric,” he said. “There’s a feeling... that they really need to move away from that.”
However, in a paper Jacob wrote jointly with Michaela Collord of Oxford University, the pair noted that “the danger” for Hassan “is that under Kikwete, this model was associated with high levels of corruption and unproductive rent-seeking".
The move to a more pro-business stance, Jacob told Upstream, “will be resisted by some people in the party who very much believe in the strong role of the state".
As for the LNG project, he remarked that “it was the brainchild of Kikwete from the get-go”, with LNG issues handled by technocrats before they were sidelined during Magufuli’s tenure “in a strong wave of resource nationalism".
Jacob said the national LNG steering committee under the previous presidency was housed at the prime minister’s office, with talks overseen by Palamagambi Kabudi who, he said, was “the most influential person in Magufuli’s government".
Hassan, a Zanzibari Muslim, has appointed Kabudi as her Minister of Justice, which suggests his influence may be reduced, given that he previously held the foreign affairs portfolio.
It is unclear if he will remain involved in negotiations with Shell and Equinor over the LNG project.
It is understood that Minister of Energy Medard Kalimani — Magufuli’s cousin — has retained his position under the new presidency, while James Mataragio also stays on as director general of state-owned Tanzania Petroleum Development Corporation.
In other moves, Liberata Mulamula, Kabudi's permanent secretary since 2015, is the new Foreign Affairs Minister, while Mwigulu Nchemba heads up the Ministry of Finance.
Hassan has also established a Ministry of Investment, with Godfrey Mwambe handling this portfolio.
Bashiru Ally, Magufuli's choice as secretary general of the CCM, has been replaced by Hussein Katanga, the country’s ambassador to Japan.
Meanwhile, the new president appears to be drawing a line under Magufuli’s authoritarian regime, which denied the existence of Covid-19 and restricted press freedom.
Covid-19 is “not something we should be quiet about or refuse flatly or accept without doing a scientific examination", she said this week.
Hassan also lifted a ban on media put in place by her predecessor and urged regional officials to encourage freedom of expression to allow members of the public to express their grievances without being intimidated.
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