Tanzania holds talks with Shell amid renewed hope on LNG plan

Tuesday, 12 October 2021
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East African nation would like to have a Canada-style liquefaction and export plant to monetize resources 

LNG News Editor: 

Tanzanian President Samia Suluhu Hassan has held talks with Royal Dutch Shell Chief Executive Ben van Beurden and the long-planned liquefied natural gas export project was discussed.

President Samia and CEO Van Beurden held a virtual bilateral meeting, along with Tanzanian officials and senior Shell executives, in the same week that the Shell-led LNG Canada project in British Columbia announced landmark progress in construction.

Investment

“In their discussion Mr Van Beurden thanked President Samia for her efforts and determination in creating conducive investment environment for the Liquefied natural gas project in Tanzania,” said a statement from Director of Presidential Communications, Jaffar Haniu.

Mrs Samia also thanked the Shell CEO for the interest to invest in the project, adding that the move would give a vital boost to the country's economic growth.

Also participating in the talks were Minister of Energy January Makamba and the head of the Tanzanian Petroleum Development Corp. (TPDC) James Mataragio.

Makamba said there was a “strong mutual commitment” to implementing the Tanzanian LNG project.

“There’s increased certainty that this project will happen. We’re starting talks ASAP,” stated Makamba.

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 TPDC.

The Block 2 in the same Basin is operated by Norwegian energy company Equinor.

The Basin and gas resources occupy an area of some 75,000 square kilometres between the Tanzanian continental shelf edge and an area 200km east of the coast 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 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.

Resources

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 Shell CEO’s talks with President Samia of Tanzania coincided with the Anglo-Dutch company’s LNG Canada project announcing construction was more than 50 percent completed.

Building began three years ago at the BC liquefaction and export plant site at Kitimat, 640 kilometres north of Vancouver.

The initial two Trains will produce 14 million tonnes per annum of LNG. There is the possibility of expanding the facility to include up to four processing units in the future.

The engineering, procurement and construction contractors are JGC Corp of Japan and Fluor Corp. of the US.

Among the plant innovations are energy-efficient natural gas turbines and renewable electricity from local utility BC Hydro, meaning the plant will emit less than half the greenhouse-gas emissions of the average LNG facility currently in operation.

Analysts note that such liquefaction refinements could be replicated in Africa and in Asia so that developing countries could have the huge economic benefits of their undeveloped resources while meeting the West’s carbon-dioxide reduction aims.

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