Posted on :Thursday , 11th November 2021

Tanzania, Shell, and Equinor have began discussions on a major host government agreement (HGA) for a $30 billion liquefied natural gas project.

Hundreds of billions of barrels of oil will be transported from Uganda to Tanzania's Tanga port.

Under the late President John Magufuli's government, the Tanzania LNG project floundered.

Since becoming president, Samia Hassan has made it clear that she wants to accelerate the transition to first gas as quickly as feasible, and she has tasked Energy Minister January Makamba with achieving this aim.

According to the project's proponents, if the project is approved in 2022, it will be ready to go online in 2026.

A government delegation led by Makamba began talks with all proponents of the difficult LNG project yesterday, which entails transporting gas from three deepwater blocks to a landfall at Lindi, where a 10 million tonne per year liquefaction plant is planned.

Equinor's partner in Block 2 is US supermajor ExxonMobil, which controls around 20 trillion cubic feet of in-place gas resources, similar to what Shell holds in Blocks 1 and 4 with Singapore's Pavilion Energy and Jakarta-based Medco Energi.  

"Today, I initiated a dialogue between the government and the corporations Shell, Equinor, Pavilion, ExxonMobil, and [Medco] on the Tanzania shillings 70 trillion [$30 billion] Lindi project — which will change the image of our economy," Makamba tweeted.  

“In the coming weeks, we will report on the opportunities that will be available during implementation,” he added.

“For the past two months, we’ve worked hard behind the scenes to get here [and] we’re confident that a final investment decision will come sooner than is traditionally the case.”

The HGA will underpin the entire project and will establish the commercial, fiscal and legal framework to ensure that the project can move ahead.

Tanzania's national oil corporation, Tanzania Petroleum Development Corporation (TPDC), was upbeat about the HGA talks, saying, "It's on — LNG negotiations," and that "Tanzania is on pace to secure its position as East Africa's energy hub."