Tanzania Signs Deal For $30Bn LNG Project With Shell, Equinor

Tanzania has made history with the signing of the initial Host Government Agreement (HGA) for the country’s $30 billion LNG project.

In the presence of the President of the Republic of Tanzania Samia Suluhu Hassan, the country’s Minister of Energy January Makamba, and a consortium comprising global energy majors Shell, ExxonMobil, Equinor, and Ophir Energy signed the framework agreement, kicking off negotiations for the $30 billion LNG project.

With a final investment decision expected by 2025, the agreement will see the start of front-end engineering and design for the project. The agreement, which defines the fiscal, legal, and commercial terms for the onshore components of the project, kickstarts negotiations for the development that will see Tanzania unlock its over 57 trillion cubic feet of gas reserves.

“Although Tanzania has several strategic projects such as the Julius Nyerere Hydropower Station and the Standard Gauge Railway, LNG is very unique as it brings both capital and revenue,” stated President Hassan at the signing ceremony.

“When completed, the project will change the country’s economic outlook, unlock the economic growth, and capture benefits from LNG exporting to the global market. Therefore, I long to see phase two of the negotiations being timely wrapped up so that we pave the way for the projects’ implementation as planned later in 2025,” he added.

Following the discovery of sizeable offshore gas reserves in 2010 and the consortium proposing an onshore liquefaction project in 2014, progress has been slow regarding project takeoff. Now, with the inauguration of President Hassan, who has placed the project as a top priority, efforts to fast-track development have already been seen.

With the signing of the agreement, the government expects project operations to begin by 2029-2030, positioning the country as a global LNG exporter and highly competitive African gas economy.

“The signing of the $30 billion initial LNG agreement is a big win not only for Tanzania but for Africa at large. The African Energy Chamber both welcomes this historic development and encourages other African countries rich with natural gas to follow suit.

“The signing represents the same push but with a reformist mindset President and should be commended. When we open up Africa and create enabling environments for investment, capital will flow in, and this deal is an example of that,” states NJ Ayuk, Executive Chairman of the AEC.

Tanzania’s $30 billion project represents one of the biggest in Africa and will be the focus of African development alongside other large-scale developments including Senegal and Mauritania’s Greater Tortue Ahmeyim project, Mozambique’s multi-LNG developments, and Equatorial Guinea’s Gas Mega Hub.

•By Bojan Lepic|Rigzone Staff
bojan.lepic@rigzone.com