Tanzania LNG Project Cost Increases to $42B

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Tanzania has revised the cost of its Liquefied Natural Gas (LNG) project upwards, estimating the total cost of the large-scale project to be $42 billion.

Initially projected at $30 billion, Felchesmi Jossen Mramb, Permanent Secretary in Tanzania’s Ministry of Energy explained that, “The recent technical analysis shows that offshore drilling and piping will push the project to $42 billion,” making the development the largest energy project in Southern and Eastern Africa.

Developed by energy majors Shell and Equinor, the Tanzania LNG project comprises the development of a large-scale LNG terminal which will process gas from the Shell-operated Blocks 1 and 4 and the Equinor-operated Block 2, expected to hold up to 16 trillion cubic feet (tcf) and 20 tcf of gas, respectively.

The announcement follows the Government of Tanzania finalizing negotiations for the development of the project with Shell and Equinor in March 2023.

Currently, contracts are being drawn for the Host Government Agreement while the Tanzanian Government is preparing for the launch of a licensing round comprising 26 exploration blocks to expand energy production in the country.

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Nicholas Nhede

Nicholas Nhede

Nicholas is an energy sector journalist with a passion on how technology and diversification of the energy mix can be used to address energy sector challenges. Nicholas holds a diploma in Journalism and Communication studies and has been covering energy-related topics including the Internet of Things, distributed energy and digitalisation since 2015.

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