Shell and Equinor complete LNG project negotiations with Tanzania

Tanzania’s Ministry of Energy has announced on Twitter that the negotiations for the construction of a $30 billion liquefied natural gas (LNG) terminal between Tanzania, Norway’s Equinor, and UK’s Shell are complete and experts are now writing contracts.

The ministry notified the public that Tanzania’s Minister of Energy January Makamba said the experts are writing two contracts. One of them is for the Host Government Agreement (HGA) and the other is a combined contract for natural gas blocks 1, 2, and 4 whose gas will be used in the LNG project.

According to Reuters’ report, the development of Tanzania’s offshore gas resources has been held up for years due to regulatory delays, and in June 2022, all three parties involved signed a framework agreement aimed at bringing closer the start of the project’s construction.

Reuters said that Shell operates Tanzania’s block 1 and block 4, which hold 16 trillion cubic feet in estimated recoverable gas, and Equinor operates block 2, which is estimated to hold more than 20 trillion cubic feet of gas, and to note, ExxonMobil holds a stake in block 2.

“Equinor and Shell, along with Exxon Mobil, Ophir Energy, and Pavilion Energy, plan to build the LNG plant in Tanzania’s southeast Lindi region,” Reuters informed, adding that “Tanzania’s government aims to reach a final investment decision in 2025 for the facility.”