Shell Raises Hopes For Tanzania’s Natural Gas Project

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Shell has hailed Tanzania’s natural gas finds as best, with the lowest carbon intensity in its entire portfolio.

“The natural gas resources discovered in Tanzania is a very high-quality resource that has the lowest carbon intensity in the whole Shell portfolio. With today’s climate change challenges, this is a very important criterion for LNG development efficiency,” the company quotes Lead Economist, Beatus Rwechungura in a statement.

“This is what makes Tanzania LNG unique and this is what makes it an important asset for Shell,” the statement added.

Shell, together with Ophir Energy and Pavilion Energy joint operate blocks 1 and 4, have had a very successful drilling campaign in Tanzania.

In the campaign, 22 exploration and appraisal wells have been drilled achieving 23 trillion cubic feet (TCF) of discovered gas in place. The program is estimated at $2 billion.

The oil giant indicated that Tanzania LNG plant will be one of the most unique projects in the oil and gas industry with respect to carbon footprint, largely due to the gas’ high quality.

The company says Tanzania’s plant once complete will use technology that increases efficiency and reduces carbon emissions.

The construction of an LNG export terminal near huge offshore natural gas discoveries in deepwater south of the country has been held up for years by regulatory delays.

Officials say the plans to conclude talks in September with a group of oil and gas companies led by Norway’s Equinor on developing a liquefied natural gas (LNG) project in the East African country.

“The government has officially decided to begin talks in early April for construction of the LNG project,” Tanzania’s energy ministry said in a statement issued late March.

“We are keen to implement this key project for the economy and we plan  to … conclude the talks in September this year,” the ministry said.

The country’s central bank believes just starting work on the plant would add another 2 percentage points to annual economic growth of around 7 percent.

The talks are aimed at negotiating a host government agreement, which is seen as a crucial step towards reaching a final investment decision for the long-delayed project.

The decision to speed up the talks was reached following a meeting between the African country’s energy minister, Medard Kalemani, and Mette Ottøy, a senior vice president at Equinor, who is also the company’s country manager in Tanzania.

Equinor, alongside Royal Dutch Shell, Exxon Mobil and Ophir Energy, plan to build a $30 billion onshore LNG plant.

The firms plan to develop the project in partnership with the state-run Tanzania Petroleum Development Corporation (TPDC).

Tanzania invited bids in April 2018 for consultancy services to help the government conclude negotiations for the host government agreement.

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