Norwegian energy giant Equinor is looking to cash upon Tanzania’s massive gas deposits, with the Iran war and the disruption to energy flows in the Strait of Hormuz finally forcing the company to develop a long-stalled LNG export plant in the African country, a move that will also help it to diversify its revenue basket.
The volatile geopolitics has ended up reshaping the global energy industry, stripping Qatar and other Gulf producers of their reputation as some of the world’s most reliable suppliers as Tehran struck export plants and blocked shipments in retaliation for the American strikes.
Discovered more than a decade ago, the massive Tanzania gas deposit, as per the East African country’s estimates, is expected to cost about USD 42 billion to develop. Once the necessary infrastructure gets online, the nation will provide an alternative source of supply for Asian customers.
While Equinor’s talks with Tanzania over detailed investment terms and conditions have been ongoing for years, hopes for a breakthrough have been dashed on several occasions.
“You don’t want to wait too long to put new LNG volumes on the market, so maybe now is a good time to get on with it,” Equinor’s head of international operations, Philippe Mathieu, told reporters at an energy conference in Norway on Tuesday.
When asked if the Middle East LNG disruption is making the Tanzania project more attractive, Mathieu said, “Exactly. It means you are producing LNG in an area that is not exposed to these kinds of geopolitical challenges.”
Equinor and Shell are joint operators of the mega gas project, which would unlock 47.13 trillion cubic feet of natural gas deposits, while Exxon Mobil, Pavilion Energy, Medco Energi, and Tanzania’s national oil company, TPDC, will act as the partners.
As per Mathieu, Equinor is betting on making a “pretty big” oil discovery in Namibia’s PEL 90 exploration licence, hoping to match major nearby finds made by TotalEnergies and Galp.