Construction works on US $30bn liquefied natural gas (LNG) project in Tanzania is set to begin in 2023. Energy Minister Medard Kalemani announced the plans and said the scheduled date follow the resumption of talks with companies including Equinor ASA. Construction is expected to take about five years.
The billion dollar LNG project in Tanzania has been in considerations since 2014. It however stalled for more than a year under the administration of the former President, the late John Pombe Magufuli who prioritized the East Africa Crude Oil Pipeline project.
Resumption of negotiations
President Suluhu then took charge and directed her administration to fast-track delayed investments on the project. She ordered the resumption of negotiations with the companies in May, about four months after Equinor’s decision to take a US $982m impairment on the project following failure to settle fiscal and commercial terms with Tanzania.
“We expect to conclude negotiations for a number government agreement and review production sharing agreements by June next year. Compensation process have been finalized to pave way for the project,” said Kalemani.
The country will involve gas from Shell-operated blocks 1 and 4 and Equinor’s Block 2 being piped from deep-water subsea wells to two or three liquefaction trains at Lindi. These blocks house about 35 trillion cubic feet of recoverable gas, split evenly between the two operators’ assets.
“Meanwhile, discussions are ongoing on another LNG plant which will involve construction of a two- train onshore that will export gas from the country. Other project partners include Royal Dutch Shell Plc, Exxon Mobil Corp., Sophi Energy Ltd. and Pavilion Energy Pte Ltd. A pipeline network to connect and distribute gas to more than 10,000 homes and factories, in the Dar es Salaam is also being developed by the government,” said Kalemani.