Tanzania signs agreement with Shell and Equinor
WELCOME DEVELOPMENT This file photo shows Samia Suluhu Hassan inspecting a military parade in Dar es Salaam, Tanzania, on March 19, 2021. AFP PHOTO
DAR ES SALAAM, TANZANIA: Tanzania on Saturday (Sunday in Manila) signed a framework agreement with British and Norwegian energy giants Shell and Equinor to implement a $30 billion project to export its natural gas.
The agreement provides for a final investment decision by 2025 and start of operations by 2029-2030 at a liquefied natural gas plant to be built in the southern coastal town of Lindi.
It marks a significant step forward in Tanzania’s efforts to revive the export of some of the vast gas deposits off its coast, estimated at more than 57 trillion cubic feet (1.630 billion cubic meters).
“We have never reached this stage of natural gas development in the history of our country,” Energy Minister January Makamba said at the signing ceremony in the capital Dodoma.
“This project will significantly change our economy.”
“Tanzania’s geographical position makes it easier to transport natural gas to other countries, particularly in Asia. [ones]who are looking for new sources of energy.
President Samia Suluhu Hassan, also present, welcomed the preliminary agreement.
“We have reached a good stage of discussions on the LNG project, but there is still a lot of work ahead of us to talk and make it competitive,” she said.
Plans for the LNG plant had stalled for several years under her predecessor John Magufuli, and she revived efforts after becoming head of state last year.
Equinor country manager for Tanzania, Unni Fjaer, said the deal was drawn up at length.
“We had many stops, but thanks to the determination of the government, we continued to engage, to discuss and we believe that Tanzanian gas presents a huge opportunity,” she said.
Together with US company ExxonMobil, Equinor operates a block some 100 kilometers (60 miles) offshore Lindi, where it says it has found 20 trillion cubic feet (566 billion cubic meters) of natural gas.
Shell, together with Ophir Energy and Pavilion Energy, said it had discovered 16 trillion cubic feet (453 billion cubic meters) of gas in two other offshore blocks in the same area.
Tanzania’s economy has taken a hit during the coronavirus pandemic as travel restrictions hit the tourism sector, a key source of income in the East African country.