Norway’s Equinor is ready to start talks with Tanzania on developing a LNG project based on a deepwater offshore discovery, the company said Dec. 4.
Tanzanian President John Magufuli has asked his government to proceed with negotiations to set out the commercial and fiscal framework for the LNG project, said Equinor, a majority state-owned energy company formerly known as Statoil.
“Equinor will now proceed with our partner ExxonMobil with negotiations for a host government agreement,” an Equinor spokesman said in an email to Reuters.
He said it was too early to say how long talks with the government could take and how much the project would cost.
Tanzania said in 2014 that a planned LNG export plant could cost up to $30 billion.
Royal Dutch Shell, which operates deepwater Blocks 1 and 4, adjacent to Equinor’s Block 2, previously sought to develop the LNG project in partnership with Equinor and ExxonMobil.
“Shell continues to work with the government of Tanzania to establish the most cost effective and competitive solution for the LNG project in Tanzania,” a company spokeswoman said in an email to Reuters.
“We believe the government is best placed to lead the right way forward to deliver the project,” she added.
Shell declined to say whether it would join Equinor and ExxonMobil or would pursue separate talks with the government.
Shell said on its website the three blocks had sufficient gas reserves to build an onshore LNG plant, but the company was not immediately available to comment on whether it would join the other two in starting talks.
Shell estimates its two blocks hold about 453 billion cubic meters (16 trillion cubic feet) of recoverable gas, similar to the volumes in Equinor’s Block 2.
Reuters reported in June that ExxonMobil was seeking to sell its 25% stake in Block 2 as it was focusing on an even bigger project in neighboring Mozambique.
A final investment decision is expected later this year.
The agreement calls for the delivered ex-ship supply of 1.6 million tonnes per annum (MTPA) for a base term of 17 years from the commercial start date, according to a news release.
China National Oil and Gas Exploration and Development Co. (CNODC) has signed a binding agreement with Russia’s Novatek to buy a 10% stake in the Arctic LNG 2 project, Novatek said on April 25.