Since 14 years ago, when Tanzania discovered offshore gas reserves, it has hesitated to utilize them and develop a LNG project in cooperation with the international players Equinor, Shell and ExxonMobile.
Since 14 years ago, when Tanzania discovered offshore gas reserves, it has hesitated to utilize them and develop a LNG project in cooperation with the international players Equinor, Shell and ExxonMobile, as the ruling governments have continuously changed their policies, priorities and expectations.
As the latest setback, negotiations for development of Tanzania's LNG export project have been delayed due to the government-proposed changes to a financial agreement already reached with foreign investors who warn the long-delayed project has limited time to become a reality before demand for fossil fuels begins to wane.
According to the
Global LNG Database®, Tanzania has already signed a framework agreement with Equinor and Shell in May 2023 which will pave the way for launching the East African country’s proposed 10 MMT/Y LNG export project after years of delays. However, since then “progress has indeed been slower than we expected,” said Equinor spokesperson Ola Morten Aanestad.
The country also has to pass a special project law to expedite construction of the plant that “should pave the way for the final investment decision”.
Tanzanian president Samia Hassan has said that her government expects the final investment decision [FID] on the LNG project to be reached next year.
However, market players are of the opinion that Hassan-led administration has not yet taken decisive practice on the matter.
Tanzania's Block 2 is estimated to hold more than 20 TCF of gas in place, while ExxonMobil also holds a stake. Shell operates Block 1 and Block 4, which are estimated to hold some 16 TCF of recoverable gas reserves.
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