East African nation of Tanzania resumes talks with majors on using gas resources for LNG export project

Tuesday, 09 November 2021
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The East African nation of Tanzania has resumed talks with international oil and gas companies on developing substantial offshore natural gas resources for LNG production.

The Energy Minister of Tanzania, January Makamba, said talks had been held with various major oil and gas companies.

“I have started negotiations for the $30 billion Tanzania LNG project. The project will transform our economy,” stated Makamba.

Equinor of Norway, which has ownership of exploration and production licences, said talks with the Tanzanian government were expected to focus on conditions that would enable companies to invest.

“For the past two months, we've worked hard behind the scenes to get here. We're confident that a final investment decision will come sooner than is traditionally the case,” Minister Makamba declared.

The Norwegian company said it was pleased to be engaging and framing the commercial, fiscal, regulatory and legal priorities for any future project in the African country.

Tanzanian President Samia Suluhu Hassan held talks in October 2021 with Royal Dutch Shell Chief Executive Ben van Beurden and the long-planned LNG export project was discussed.

Equinor and Shell and several other companies, including Pavilion Energy, of Singapore, have stakes in the Tanzanian gas fields.

Shell became the operator of blocks 1, 3 and 4 in Tanzania in February 2016 after its takeover of BG Group and has also been working closely with the Tanzanians.

The Block 2 in the same Basin as Shell’s licence area is operated by Norway’s Equinor.

The Basin occupies an offshore area of some 75,000 square kilometres between the Tanzanian continental shelf edge and in water depths ranging from 500 metres to 3,300 metres.

Net contingent resources in the four Blocks are estimated to be at least 20 trillion cubic feet, sufficient to support a three-Train LNG development.

Equinor has a production-sharing agreement with Tanzania Petroleum Development Corp (TPDC) and is the operator with a 65 percent participating interest, while US major ExxonMobil has a working interest of 35 percent in the PSA.

TPDC has the right to participate in any project and would have a 10 percent interest.

Equinor made nine natural gas discoveries in Block 2, one of four explored blocks with proven resources offshore Tanzania.

The Norwegian company had previously said it aimed to work on the LNG project with Shell.

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