Egyptian player rolls up its sleeves to assist in developing first LNG project in Tanzania

Egypt’s Rosetta Energy Solutions, a subsidiary of Taqa Arabia, has signed a heads of terms (HoT) agreement with Tanzania Petroleum Development Corporation (TPDC) and the Africa50 infrastructure investment platform to develop Tanzania’s first small-scale liquefied natural gas (LNG) project.

According to TPDC, the project will be implemented through a partnership program between itself, Rosetta, and Africa 50, with the trio holding 30%, 44%, and 26% interests, respectively. The firm added that this was a part of its new strategy and a move to push the country’s energy sector towards a more sustainable future. 

As described by Rosetta Energy, the new venture will invest in, develop, and operate Tanzania’s first LNG virtual pipeline, comprising a small-scale liquefaction plant in Dar es Salaam, multiple cryogenic containers for road transportation, and regasification plants near customer locations.

Rosetta Energy’s CEO, Karim Shaaban, noted: “This agreement is a key milestone for what we aspire to be Tanzania’s first LNG development. It underscores our commitment to enhancing Tanzania’s natural gas infrastructure, providing competitively priced and reliable energy to foster sustainable industrial growth and local community prosperity.”

The Egyptian player aims to establish Tanzania as a regional energy hub, leveraging TAQA Arabia’s experience in gas, renewables, LNG, power, and water solutions. The virtual LNG pipeline is meant to provide affordable and cleaner energy for homes, industry, and transportation, while the modular design will enable it to accommodate the expected fluctuations and future rise in energy demands in developing areas.

“With a target investment exceeding $100 million, the project will generate multiple jobs throughout the value chain, significantly contributing to domestic GDP and local content development. Together with our partners, we aim to accelerate the project with potential construction starting as early as 2025,” added Shaaban.

Speaking at the HoT signing event Director General of Tanzania’s Energy and Water Services Regulatory Authority, Dr. James Andilile, said that the small-scale LNG project would help expand the range of natural gas supply and facilitate its use throughout the country.

Andile said: “This step of signing shows the sincere efforts of the Government through TPDC in encouraging the supply of natural gas throughout the country, a goal that we are all working hard to achieve.” 

While the demand for natural gas in the country is high, he points out that the natural gas network is present in only four regions. However, the small-scale LNG project is set to change this, as TPDC’s Executive Director, Ndugu Mussa Makame, stated that seven additional regions would benefit from it immediately upon implementation.

Acting Chairman of TPDC’s board of directors, Paul Makanza, commented that the project would contribute to the country’s growth by promoting industries and bringing economic benefits to society thanks to the reduced cost of production of products and increased use of natural gas in industries.

As Africa is becoming a new exploration hotspot, a geographical shift is expected in its LNG sector, while the United States is estimated to be in a good position to spearhead the expansion of LNG and floating liquefied natural gas (FLNG) projects across the continent.

Additionally, an oil discovery was recently made off the coast of Namibia, while Eni’s Congo LNG project saw its first LNG cargo prepared for export.