Key facts
- A $42 billion LNG export project in Tanzania is seen as more attractive due to Middle East conflict.
- The conflict has disrupted LNG supply through the Strait of Hormuz.
- Equinor and Shell are co-operators of the Tanzanian LNG project.
- Negotiations with the Tanzanian government over project terms have been ongoing for years.
- Significant natural gas reserves have been discovered offshore Tanzania.
The ongoing conflict in the Middle East has heightened the appeal of a proposed $42 billion liquefied natural gas (LNG) export project in Tanzania, according to Equinor. Philippe Mathieu, an executive vice president at the Norwegian energy major, stated that the disruptions to LNG supply through the Strait of Hormuz make the Tanzanian project more attractive due to its geographical advantage, avoiding such geopolitical challenges.
However, the development of the Tanzanian LNG project, a joint endeavor by Equinor and Shell, has been stalled for years due to protracted and difficult negotiations with the Tanzanian government over the terms and conditions. This project, which aims to connect offshore natural gas discoveries with a coastal export terminal, has been in the making for a decade.
Shell, which became the operator of offshore Blocks 1 and 4 in Tanzania after acquiring BG Group in 2016, along with partners Medco Energi and Pavilion Energy, has identified 16 trillion cubic feet (Tcf) of natural gas. Equinor, operating in Block 2 offshore Tanzania since 2011, has made nine discoveries estimated to hold over 20 Tcf of gas in place.