Norwegian state-owned energy company Equinor (OSE: EQNR, NYSE: EQNR) has decided to write down the book value of its Tanzania LNG project (TLNG) on the company’s balance sheet by USD 982 million.
This will be reflected in adjusted earnings for EPI division in fourth quarter 2020 results to be reported on 10 February 2021.
The company explains that while progress has been made in recent years on the commercial framework for TLNG, overall project economics have not yet improved sufficiently to justify keeping it on the balance sheet.
“The TLNG project has an anticipated breakeven price well above the portfolio average for Equinor and is, at this time, not competitive within this portfolio,” the company adds.
“Equinor will continue to engage with the Government of Tanzania in negotiations on a commercial, fiscal and legal framework that may provide a viable business case for TLNG in the future,” Equinor concludes.
Tanzania LNG Project
The Tanzania Liquefied Natural Gas Project (TLNGP), also knows as the Likong’o-Mchinga Liquefied Natural Gas Project (LMLNGP), is a planned liquefied natural gas processing plant to be located on the Indian Ocean coast on Tanzania, opposite the country’s main offshore gas exploration sites.
Tanzania has proven natural gas reserves of 57 trillion cubic feet, with at least 49.5 trillion cubic feet 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.