Tanzania completes talks with Shell and Equinor for $30bn LNG terminal

Published on : 2023-03-08

Tanzania has completed talks with Norway’s Equinor and Britain’s Shell for the construction of the proposed $30bn liquefied natural gas (LNG) terminal, reported Reuters, citing Tanzania’s Energy Ministry.

The partners have commenced contract preparations for the terminal, which is planned to be built near large-scale offshore natural gas discoveries in deep waters off Tanzania’s southern coast.

Tanzania postponed the development of its huge offshore gas resources for a number of years due to regulatory delays.

In June 2022, Tanzania, Shell, and Equinor signed a framework agreement to speed up the start of the construction of the LNG export terminal project.

The government expects to make the final investment decision on the terminal in 2025.

Tanzania Energy Ministry stated in Twitter: “Minister January Makamba said negotiations on the construction of the LNG project were complete, and now experts are at work drafting contracts.

“Of these contracts, one is about the Host Government Agreement and another is on joining blocks 1, 2, and 4, which will provide natural gas for the LNG project.”

As of June 2022, the government has estimated the amount of total recoverable gas in the country to be at 57.54 trillion cubic feet.

Equinor operates block 2 in Tanzania. This block is estimated to hold more than 20 trillion cubic feet of gas.

Shell operates block 1 and block 4 in Tanzania. These blocks have total estimated recoverable gas reserves of 16 trillion cubic feet.

Equinor and Shell, together with Ophir Energy, Exxon Mobil, and Pavilion Energy, are planning to build the LNG plant in the country’s south-east Lindi region.

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