Equinor Shell and Tanzania Sign Framework Agreement for LNG Plant

On 11th June 2022, the Ministry of Energy of Tanzania and the Tanzania Petroleum Development Corporation (TPDC) signed a framework agreement with energy companies Equinor of Norway and Shell of Britain to pave the way for the construction of a liquefied natural gas (LNG) export terminal.

The Tanzania Liquefied Natural Gas Project (TLNGP) is a planned USD 30 billion liquefied natural gas (LNG) processing plant to be located in the Indian Ocean, opposite Tanzania’s main offshore gas exploration sites.

The project involves the TPDC and the Government of Tanzania together with a number of international energy companies active in the country including Equinor, Shell, and ExxonMobil.

However, in February 2021 Equinor decided to write down the book value of the project on the company’s balance sheet by USD 982 million, because the project’s economics were not adequate.

But in November 2021, Tanzania’s President Samia Suluhu Hassan resumed negotiations with investors for the development of the project.

During the signing ceremony, Tanzania’s Energy Minister January Makamba said that the final investment decision is expected in 2025.

Posting on her Twitter account, Tanzania’s President Samia Suluhu Hassan commented: “I am pleased to witness the signing of an initial Host Government Agreement (HGA) for a natural gas processing project between our country and investors. The TZS 70 trillion to be invested will bring about a major revolution to boost our economy and the well-being of Tanzanians.”

Tanzania Gas

Tanzania has proven natural gas reserves of 57 trillion cubic feet, with at least 49.5 trillion cubic feet (Tcf) of those reserves far offshore in the Indian Ocean.

The Ministry of Energy of Tanzania first announced its intention to develop an LNG plant in Tanzania in 2014.

Following an extensive site selection process, a site was identified in the Lindi region to host the onshore LNG plant.