Shell, Equinor and the government of Tanzania have finalised negotiations for the construction of a $30 billion LNG terminal and contract preparation is underway, Tanzania’s energy ministry said.
“Minister January Makamba said negotiations on the construction of the LNG project were complete, and now experts are at work drafting contracts,” the energy ministry said on its Twitter account late Monday.
The huge project aims to pipe some 40 trillion cubic feet of gas held in deepwater blocks 1, 2 and 4 to a 10 million tonnes per annum LNG plant at Lindi. The development of Tanzania’s vast offshore gas resources has been held up for years due to regulatory delays.
Last June, Shell and Equinor signed a framework agreement with Tanzania, which was aimed at bringing closer the start of the project’s construction. The government aims to reach a final investment decision in 2025 for the facility.
Shell operates Tanzania’s Block 1 and Block 4, which hold 16 trillion cubic feet in estimated recoverable gas.
Norwegian oil and gas producer Equinor also operates Block 2, in which ExxonMobil holds a stake and which is estimated to hold more than 20 trillion cubic feet of gas.
