Page 4 - AfrOil Week 26 2022

AfrOil COMMENTARY AfrOil

(Photo: Angola LNG)
Towards a new gas tax

regime for Angola LNG

The National Assembly authorises Angola’s president to reduce tax rates on purchases

of natural gas, which is currently a less attractive feedstock than associated gas

LAST week, Angola’s government took a step international oil companies (IOCs) that is oper-
towards authorising a new tax regime for the ating the Angola LNG plant, Barroso explained.
WHAT: Angola LNG project. It did not do so directly, via He said Luanda wanted to cut the tax rate levied
MPs have given President the adoption of new tax legislation, but through on purchases of natural gas to support wider
Lourenço the power to the passage of a bill that gives the country’s pres- efforts to promote the development of the
cut tax rates for natural ident the power to decide the matter. domestic natural gas sector, such as the forma-
gas purchases. The bill came up for a vote in the National tion of the New Gas Consortium (NGC) and the
Assembly, Angola’s unicameral legislature, on passage of a gas law.
WHY: June 23. It passed easily, with 133 MPs voting
Under existing arrange- for it and only one against, with no abstentions, Associated vs. natural gas
ments, Angola LNG and is now due to go to President João Lourenço The initiative makes sense in light of the origins
receives associated gas
for free. for endorsement. of the Angola LNG project.
Angola’s Secretary of State for Petroleum Angola didn’t start producing LNG because
WHAT NEXT: and Gas José Barroso had said when presenting it possessed large amounts of natural gas. Rather,
Luanda has incentives the draft bill to the National Assembly that the it did so because it had large amounts of crude
to pay attention to LNG measure would give Lourenço the authority to oil, with considerable volumes of associated gas
exports in light of the make changes to the tax regime governing the in the mix. In the late 1990s, several of the IOCs
Russia-Ukraine struggle, Angola LNG project. He also indicated, though, working in its offshore zone began considering
but it must also invest in that the president’s intent was not to gain addi- the question of what to do with this gas. They
domestic capacity. tional power but to make specific changes. decided that they had enough to support a liq-
One of these changes will be a reduction uefaction plant, and in 2013, they brought the
in the tax burden shouldered by the group of $12bn Angola LNG plant on stream in Soyo.

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