Tanzania's gas sector is approaching a pivotal moment. After years of exploration, negotiation and delay, the country's vast offshore gas resources are moving closer to becoming a major driver of industrial growth, export earnings and domestic energy security. The proposed Tanzania LNG project, backed by Shell, Equinor and ExxonMobil, remains the centrepiece of this ambition, but domestic power generation and industry could also benefit.
The country currently produces around 226m cubic feet of gas a day, which supports about 42% of national power production, as well as some industrial consumers, including cement manufacturers, metal fabrication plants and breweries. This barely scratches the surface of estimated recoverable gas reserves of 57 trillion cubic feet, of which about 47 trillion cubic feet is located offshore in the southeast, close to Mozambique's own huge reserves.
Liquefied natural gas (LNG) development is the most obvious means of monetising these giant gas reserves, with output to be shipped to Asian markets in particular. But getting the planned $42bn Tanzania LNG project off the ground has not been easy. Apart from field development on the Shell-operated Blocks 1 and 4 and Equinor and ExxonMobil's Block 2, an onshore LNG plant near Lindi with production capacity of 10m to 15m tons per year is planned. The plant will be spread across two liquefaction trains, or production lines.
The project would boost Tanzania's annual GDP by about 7%, according to Equinor modelling.
Originally published by African Business.