The Tanzanian government has concluded talks with Norway’s Equinor and British energy giant Shell regarding the building of a terminal for LNG exports, utilizing the nation’s enormous offshore resources.
The expected investment to be made in the facility is $30 billion and the parties are in the process of drafting contracts, the African nation’s Energy Ministry announced on Twitter on Tuesday.
According to Tanzanian Energy Minister January Makamba, one of the agreements will encompass the development of offshore fields run by Shell that will supply gas for the LNG project.
In Tanzania, together with its allies Medco Energi (Ophir Energy) and Pavilion Energy, Shell assumed control of two offshore blocks. The deposits contain confirmed natural gas reserves totaling 16 trillion cubic feet (Tcf).
Since 2011, Equinor has found nine gas deposits in Tanzania totaling more than 20 Tcf, and is currently engaged in research and drilling activities there.
The beginning of large-scale LNG production in Tanzania has so far been hampered by regulatory barriers, but the most recent development in talks may hasten plans to begin monetizing the vast offshore gas reserves in the late 2020s or early 2030s.
The government of Tanzania anticipates making a definitive investment choice for the LNG terminal in 2025.
Exxon Mobil, Ophir Energy, Pavilion Energy, Equinor, and Shell intend to construct the LNG facility in Tanzania’s southeast Lindi region.
