According to the country’s Energy Minister, January Makamba, Tanzania will sign important contracts with oil majors including Equinor ASA and Shell Plc next month to open the door for a $40 billion liquefied natural gas export project.
January Makamba said, “It’s happening,” in an interview for the COP27 international climate summit in Sharm el-Sheikh, Egypt. Discussions for the fiscal package are now in progress, and we’ll wrap this up in December.
The project, delayed by years of prolonged negotiations, has gained urgency as European countries look for liquefied natural gas projects that can be long-term replacements for energy supplies from Russia.
The accords will include the final host government agreement, which spells out the terms of the project, the project law, and the benefit-sharing agreement, Makamba said. A final investment decision could be reached in January 2025, allowing exports to start before 2030, he said.
Gas will be delivered from three blocks to the plant, which has the capacity to produce 15 million tons of liquefied gas a year. The other companies involved are Exxon Mobil Corp. and Pavilion Energy.
Tanzania and other African countries, including Mozambique and Nigeria, are seeking to ramp up production of gas while the world is trying to limit the use of fossil fuels that cause global warming.
African leaders have argued for exploiting their resources to increase energy supply on a continent with the least amount of power generation and boost economies that are still reeling from the impact of the COVID-19 pandemic.
According to Makamba, Tanzania is making every effort and using new technology to clean up its gas.
According to him, the project will be built in such a way that it would be the cleanest gas plant ever. The gas’s chemistry is one of the most astonishingly low, having the lowest CO2 percentage in the world.
