Critical talks are set to start early next month on the $30 billion Tanzania liquefied natural gas project.
The project is being backed by Anglo-Dutch giant Shell and Norwegian major Equinor which plan to feed gas from offshore blocks 1, 2 and 4 to a 10 million tonne per annum LNG complex at Lindi.
According to Tanzania’s Ministry of Energy, negotiations on the all-important Host Government Agreement (HGA) will kick off on 8 November.
The HGA will underpin the entire project and will establish the commercial, fiscal and legal framework to ensure the project can move ahead.
Last Thursday, Minister of Energy January Makamba held talks with Paul McCafferty, the vice president of Equinor’s Africa upstream business.
The ministry tweeted that the talks "are part of preparations for the negotiations on the HGA convention for the (LNG) project which are expected to officially start on 8 November 2021."
Discussing the meeting with McCafferty in his own tweet, Makamba said: “We both expressed optimism about the investability of the Tanzania LNG project. We start negotiations on 8 November.”
An Equinor spokesperson told Upstream that McCafferty's meeting with the energy minister was constructive.
“We had a good meeting with the Minister for Energy, (January) Makamba, an opportunity which we appreciate. We are pleased with the minister's assured commitment towards the upcoming negotiations and the goal of realising the LNG project in Tanzania.
"The Tanzania LNG investors have been engaging with the government of Tanzania and continues to be pleased about the partnership, co-operation and opportunities associated with the largest potential investment in the country’s history."
The spokesperson said Equinor remains "committed" to the project and ...the team from the investors for block 1, 2 and 4 ...are ready to meet with the government team to progress the negotiations."
Shell could not discuss Tanzania LNG because the company is in a closed period ahead publishing its quarterly results.
Meanwhile, earlier this month – on 8 October – the minister met Donald Wright, the US Ambassador to Tanzania, with who he talked about American investments in the LNG project, the energy sector, rural electrification, renewable energies and institutional reforms of energy parastatals.
“The US will continue to be our partner in energy sector,” said Makamba.
US supermajor ExxonMobil is Equinor’s partner in Block 2 offshore Tanzania which holds about 20 trillion cubic feet of in-place gas resources, about the same volumes as held in Shell’s blocks 1 and 4 where its partners include Singapore’s Pavilion Energy and Indonesia-based Medco Energi.
* Article updated to include a response from Equinor
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