Uhuru, Suluhu in deal to build Dar-Mombasa LNG pipeline


Economy

Uhuru, Suluhu in deal to build Dar-Mombasa LNG pipeline


President Uhuru Kenyatta with Her Excellency Samia Suluhu Hassan, President of the United Republic of Tanzania at State House, Nairobi. PHOTO | PSCU

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Summary

  • President Uhuru Kenyatta and his Tanzanian counterpart Samia Suluhu announced at a press conference in Nairobi that the project would be part of a long-term plan to expand infrastructure between the two countries.
  • President Suluhu said respective government officials had been instructed to commence works on the project immediately.
  • The two leaders did not provide timelines but the Memorandum of Understanding on Cooperation in Natural Gas Transportation means the countries’ Energy ministries could start negotiating the design for the pipeline.

Kenya and Tanzania yesterday signed a deal to build a liquefied natural gas (LNG) pipeline from Dar es Salaam to Mombasa that will be used for electricity generation and possibly for cooking as well as heating.

President Uhuru Kenyatta and his Tanzanian counterpart Samia Suluhu announced at a press conference in Nairobi that the project would be part of a long-term plan to expand infrastructure between the two countries.

President Suluhu said respective government officials had been instructed to commence works on the project immediately.

“That is a long-term project…we are thankful that today we have signed an agreement… what remains is implementation,” she said.

“We have agreed on the need to ease the transportation of key energy resources and have reached one such understanding on the transportation of gas. What we need to do now is start implementing the project.”

The two leaders did not provide timelines but the Memorandum of Understanding on Cooperation in Natural Gas Transportation means the countries’ Energy ministries could start negotiating the design, cost and other logistics needs for the pipeline.

“We have agreed on ways of tapping Tanzania’s natural gas,” said President Kenyatta.

RISING DEMAND

The LNG project comes a decade later after initial plans, which valued the pipeline at Sh63 billion, failed to take off.

In 2011, Kenya announced plans to build $500 million (Sh53.8 billion) LNG terminal at the port city of Mombasa to diversify sources of electricity to meet rising demand.

An East African Community study at the time showed that a pipeline to move natural gas from Dar es Salaam to the terminal would cost up $630 (Sh67.8 billion.)

Tanzania has so far discovered more than 57 trillion cubic feet of natural gas and is engaging international oil firms on the terms of developing a $30-billion LNG project.

Tanzania has said it plans to export surplus electricity to energy-starved nations in eastern and southern Africa once it has boosted its generation capacity.

Foreign oil and gas companies Equinor, alongside Royal Dutch Shell, Exxon Mobil and Ophir Energy and Pavilion Energy, plan to build the onshore LNG plant in Lindi region.

The international oil companies will develop the project in partnership with the state-run Tanzania Petroleum Development Corporation.



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