Tanzania expects a consortium of international oil companies to begin a long-delayed liquefied natural gas (LNG) project in 2022, its energy minister announced.
Construction of an LNG export terminal near huge offshore natural gas discoveries in the deep water south of the country has been held up for years by regulatory delays.
The Tanzanian government had said it planned to conclude talks in September with a group of foreign oil and gas companies led by Norway’s Equinor on developing the LNG terminal.
Equinor, alongside Royal Dutch Shell, Exxon Mobil, Ophir Energy and Pavilion Energy, plan to build the onshore LNG plant in the country’s Lindi region.
“Construction of this project is expected to begin in 2022 and will be concluded in 2028,” Medard Kalemani, Tanzania’s energy minister, says.
The country’s central bank believes work on the $30 billion plant will add another two percentage points to annual economic growth.
“The project will have capacity to produce 10 million tonnes per annum (MTPA) of liquefied natural gas”, he says.
The international oil companies (IOCs) will develop the project in partnership with the state-run Tanzania Petroleum Development Corporation (TPDC). “We instructed the government negotiation team to hold separate talks with each individual investor, instead of the previous arrangement of holding joint talks with all the investors. We expect these talks to be completed within seven months” Kalemani adds.
The talks are aimed at negotiating a “host government agreement” which is seen as a crucial step towards a final investment decision for the project.
Tanzania has estimated recoverable reserves of over 57.54 trillion cubic feet (tcf) of natural gas.
The country already uses some of the gas for power generation and running of manufacturing plants. It also plans to build a fertiliser plant.
Construction of the $1.9 billion fertiliser plant will begin in 2021 and is expected to be commissioned in 2024.
The project is a joint venture between TPDC and German firm, Ferrostaal Industrial Projects, Danish industrial catalysts producer Haldor Topsoee and Pakistan’s Fauji Fertilizer Company.