Tanzania Government Signs Natural Gas Deal with Shell and Equinor

Posted on : Monday , 27th June 2022

The Government of Tanzania has signed a liquefied natural gas (LNG) framework agreement with energy giants Equinor and Shell, Reuters reported.

The signing of the deal will expedite the start of the construction of a $30bn LNG export terminal.

The deal is expected to pave the way for a final investment decision on the $30bn LNG export terminal by year 2025, the news agency quoted Tanzania’s Energy Minister January Makamba as saying.

The facility, which is planned to be constructed near large-scale offshore natural gas discoveries in deep waters off, Tanzania’s southern coast, has been facing regulatory delays for a number of years.

Makamba was cited by Al Jazeera as saying, during the signing ceremony in Dodoma: “We have never reached this stage of natural gas development in the history of our country.

“This project will significantly change our economy. Tanzania’s geographical positioning makes it easy to transport the natural gas to other countries, especially Asian ones, which are looking for new sources of energy.”

Shell Tanzania vice-president and board chairman Jared Kuehl was quoted by Reuters as saying: “We believe Tanzania has advantages because it has a strategic location and the opportunity to deliver a competitive and investable project.”

Equinor and Shell, together with Ophir Energy, Exxon Mobil, and Pavilion Energy, plan to build the proposed LNG plant in the Lindi region.

The project is planned to be commissioned by 2029 to 2030.

Equinor operates Tanzania’s Block 2, which is estimated to hold more than 20 trillion cubic feet of gas.

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

As per the government’s estimates, the country has total recoverable gas reserves of 57.54 trillion cubic feet, according to Reuters.