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    Tanzania pens gas deal with Equinor, Shell

Summary

Tanzania is looking to develop an LNG export project underpinned by trillions of cubic feet of gas off its coast.

by: Shardul Sharma

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Complimentary, Natural Gas & LNG News, Africa, Liquefied Natural Gas (LNG), Security of Supply, Corporate, Exploration & Production, Import/Export, Investments, News By Country, Tanzania

Tanzania pens gas deal with Equinor, Shell

Tanzania has signed a framework agreement with Equinor and Shell to implement a $30bn LNG export project, the government said on June 11.  

The country’s president Samia Suluhu Hassan on Twitter said that the project will boost the economy and improve the lives of Tanzanians. The country’s energy minister January Makamba said the signing would pave the way for a final investment decision in 2025 on the project.

Equinor, which had in 2021 booked a $982mn writedown on the 7.5mn metric tons/year LNG export project having decided it would not be sufficiently profitably, said in a statement it was too early to say whether it would reverse that writedown as a result of the deal, Reuters said in a report.

The project is underpinned by trillions of cubic feet of gas off Tanzania's coast. It languished for years under the rule of former president John Magufuli, but his successor Hassan has said the project is a priority.

Equinor has been working in Tanzania since 2007 when it signed a production-sharing agreement to explore the offshore Block 2, estimated to hold 20 trillion ft3 of in-place gas. ExxonMobil holds the remaining 35% interest in the project, but Equinor signed a memorandum with Shell last year to collaborate in developing the liquefaction facility. Shell operates Block 1 and Block 4, with 16 trillion ft3 in estimated recoverable gas.