By Fumbuka and Ng'wanakilala
DAR ES SALAAM, Jan 29 (Reuters) - Tanzania said on Friday ithad finalised a land acquisition for the site of a plannedliquefied natural gas (LNG) plant and was now working tocompensate and resettle villagers to move forward on along-delayed project.
Tanzania's natural gas reserves are estimated at more than55 trillion cubic feet (tcf) and the central bank believes 2percentage points would be added to annual economic growth of 7percent simply by starting work on the huge plant that woulddraw in billions of dollars of investment.
BG Group, being acquired by Royal Dutch Shell, along with Statoil, Exxon Mobil andOphir Energy plan to build the onshore LNG exportterminal in partnership with the state-run Tanzania PetroleumDevelopment Corporation (TPDC). They aim to start it up in theearly 2020s.
But their final investment decision has in part been held upby delays in finalising issues related to the site.
"After securing the title deed, the law requires the ownerto pay compensation to the relevant parties based on a valuationdone by the chief government valuer," TPDC said in a statement.
TPDC now owns title deed for some 2,071.705 hectares of landthat have been set aside for the construction of the plannedtwo-train LNG terminal at Likong'o village in the southernTanzanian town of Lindi, which is located close to largeoffshore gas finds.
Another 17,000 hectares of land around the site for theproposed LNG terminal has been allocated for an industrial park.
The land was bought from large landowners and someindividual villagers.
Tanzania's new president, John Magufuli, has promised moreurgency in decision-making, responding to a frequent complaintfrom businesses. One example has been delays in finalising asite for the multi-billion dollar LNG plant that will exploithuge offshore gas finds.
Oil companies were unable to gain access to the site untilthe land purchase, analysts say.
"The next key thing to watch is how quickly a hostgovernment agreement is executed between the Tanzaniangovernment, TPDC and IOCs (international oil companies)," AhmedSalim, senior associate at consultancy Teneo Intelligence, saidin a note to clients.
East Africa is a new hotspot in hydrocarbon explorationafter substantial deposits of crude oil were found in Uganda andmajor gas reserves discovered in Tanzania and Mozambique.
Mozambique's plans to build an LNG plant have moved moreswiftly. With other LNG projects moving ahead around the world,the best deals for long term gas sales contracts will likely besecured by those who come on stream first, analysts say. (Reporting by Fumbuka Ng'wanakilala; Editing by Drazen Jorgicand Mark Potter)