Long-delayed negotiations between Tanzania and oil majors for a $42 billion onshore liquefied natural gas plant were concluded in May, paving the way for deals to be signed in July.
The East African nation could confirm a host government agreement and an amended production sharing agreement with the project consortium that includes Equinor ASA, Shell Plc and Exxon Mobil Corp. already next month, according to the permanent secretary of the Ministry of Energy, Felchesmi Mramba. It also aims to pass a bill to speed up the construction of the plant.
“We want to have a special law for this project,” he said on the sidelines of an energy conference in Kenya’s capital, Nairobi. “That should pave the way for the final investment decision. The sooner we get those two, the sooner foreign direct investment comes in.”
Tanzania now expects its first LNG export within five years after the facility is built, he said.
If successful, it will likely become the second country to export gas off the east African coast. Neighboring Mozambique marked its first shipments from a floating LNG terminal in November.
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About 10% of the gas to be produced from the proposed LNG terminal, about 250 million standard cubic feet per day, will be used domestically to power industries, Mramba said. Tanzania estimates that it has recoverable natural gas reserves of more than 57 trillion cubic feet.
The government is keen to accelerate the development of its natural resources and plans to conduct joint oil and gas exploration with China Cnooc Ltd. in two offshore blocks held by cmd, the state-owned Tanzania Petroleum Development Corp. Work on deepwater blocks 4/1B and 4/1C will be near large gas deposits, according to Energy Minister January Makamba.
Search for hydrocarbons on the continent has grown steadily since the fall of 2020 as European nations seek to diversify their energy supply and reduce dependence on Russian gas.
