Tanzania President H.E. Samia Suluhu Hassan has called for the resumption of negotiations to seal a $30 billion LNG project in Lindi, with construction of the project set to commence in 2022.
President Suluhu has directed the Minister of Energy, Medard Kalemani, to negotiate terms with stakeholders, Shell and Equinor, between April and September this year.
The project will see the country tap into gas from Shell-operated Blocks 1 & 4 and Equinor’s Block 2, which will be piped from deep-water subsea wells to liquefaction trains at Lindi. These blocks house an estimated 35 trillion cubic feet of recoverable gas, split evenly between the assets of the two operators.
The $30 billion project will have the capacity to produce 10 million tons of LNG every year and is projected to increase the annual economic growth of the east-African nation by 2% and increase the domestic use of gas by 10%.
According to GlobalData, negotiations for the capital-intensive onshore LNG project have been delayed for many years due, in part, to the country’s political uncertainty and delays in the approval of a new and regulatory framework. Another reason for sidelining the project is the prioritization of the East Africa Crude Oil Pipeline being built to take oil from Uganda to the Tanzanian port of Tanga.
Other project partners include Royal Dutch Shell Plc, Exxon Mobile Corp. and Pavilion Energy Pte, in partnership with the state-run Tanzanian Petroleum Development Corporation (TPDC).
The project has been labeled as, “a huge opportunity for Tanzania to benefit from its rich gas resources is within its grasp,” by Shell Tanzania Managing Director, Frederik Grootendorst who noted that Tanzania has an estimated 58 trillion cubic feet of natural gas reserves.
The offshore deepwater gas in southern-Tanzania is located in fields over 100km offshore, with some at a depth of up to 2,500m below sea-level and more than 2,000m below the seabed.
The technical difficulty of developing the capability to access these reserves means the Tanzania LNG project is at the cutting edge of deep-sea exploration technology and provides a unique opportunity for development in the local supply chain and within the TPDC as the project tackles these obstacles.
