Oil & Gas

The proposed $42-billion Tanzania LNG project is becoming more attractive as the conflict in the Middle East disrupts LNG supplies through the Strait of Hormuz. Equinor says the crisis highlights the need for new LNG sources that are located away from major geopolitical risks.

However, the project has faced delays for years. Equinor and Shell, which are jointly developing the project, have struggled to reach final agreements with the Tanzanian government over investment terms, regulations and other conditions needed to begin construction.

The project would connect large offshore natural-gas discoveries to an LNG export terminal on Tanzania’s coast. Shell and its partners have discovered around 16 trillion cubic feet (Tcf) of gas in Blocks 1 and 4, while Equinor has made nine discoveries in Block 2, with more than 20 Tcf of estimated gas in place.

Equinor now believes the changing global energy landscape could provide a stronger reason to move the project forward. Producing LNG from Tanzania would offer an export source outside the politically sensitive Gulf region, potentially strengthening Tanzania’s position as a major future LNG supplier.