Tanzania Reaches Agreement with Shell and Equinor for $30 Billion LNG Terminal

  • 9-Mar-2023
  • Journalist: Jaideep

Tanzania [Africa]: Tanzania's Energy Ministry has recently announced the completion of talks with Norway's Equinor and Britain's Shell for the construction of a proposed $30bn liquefied natural gas (LNG) terminal. Preparations are underway to sign the contracts, which will enable the development of a terminal near large-scale offshore natural gas discoveries in deep waters off Tanzania's southern coast.

In June 2022, Tanzania announced that it had reached an agreement with Shell and Equinor to accelerate the development of its huge offshore gas resources. This decision came after regulatory delays had caused several years delay in the start of the project, which includes the construction of a Liquefied Natural Gas (LNG) export terminal.

The government is anticipated to come to a final decision on the terminal investment in the year 2025.

Tanzania Energy Ministry stated: “Minister January Makamba stated 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.”

Tanzania is estimated to have a total of 57.54 trillion cubic feet of recoverable gas, according to the government's June 2022 estimate. Equinor operates Block 2 in Tanzania, which is estimated to hold more than 20 trillion cubic feet of gas. Shell has operations in Blocks 1 and 4 in Tanzania, with a combined estimated recoverable gas reserve of 16 trillion cubic feet.

Equinor and Shell, alongside Ophir Energy, Exxon Mobil, and Pavilion Energy, are setting their sights on constructing a liquified natural gas (LNG) plant in the Lindi region of southeast. It will be a major project for the region and will provide many economic benefits.

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