• 8 hours Shell Oil Trading Head Steps Down After 29 Years
  • 12 hours Higher Oil Prices Reduce North American Oil Bankruptcies
  • 14 hours Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 16 hours $1.6 Billion Canadian-US Hydropower Project Approved
  • 17 hours Venezuela Officially In Default
  • 19 hours Iran Prepares To Export LNG To Boost Trade Relations
  • 21 hours Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 1 day Saudi Oil Minister: Markets Will Not Rebalance By March
  • 1 day Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 2 days Rosneft Announces Completion Of World’s Longest Well
  • 2 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 2 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 2 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 2 days Santos Admits It Rejected $7.2B Takeover Bid
  • 2 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 2 days Africa’s Richest Woman Fired From Sonangol
  • 3 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 3 days Russian Hackers Target British Energy Industry
  • 3 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 3 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 3 days Lower Oil Prices Benefit European Refiners
  • 3 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 4 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 4 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 4 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 4 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 4 days OPEC To Recruit New Members To Fight Market Imbalance
  • 4 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 4 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 4 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 5 days GE Considers Selling Baker Hughes Assets
  • 5 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 5 days Saudi Aramco To Invest $300 Billion In Upstream Projects
  • 5 days Aramco To List Shares In Hong Kong ‘For Sure’
  • 5 days BP CEO Sees Venezuela As Oil’s Wildcard
  • 5 days Iran Denies Involvement In Bahrain Oil Pipeline Blast
  • 7 days The Oil Rig Drilling 10 Miles Under The Sea
  • 8 days Baghdad Agrees To Ship Kirkuk Oil To Iran
  • 8 days Another Group Joins Niger Delta Avengers’ Ceasefire Boycott
  • 8 days Italy Looks To Phase Out Coal-Fired Electricity By 2025
John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

More Info

Fast Growing Tanzania Looks To Begin LNG Production By 2020

Fast Growing Tanzania Looks To Begin LNG Production By 2020

With an estimated 46.5 trillion cubic feet of natural gas reserves that are expected to rise to 200 trillion cubic feet in the next two years, Tanzania is now firmly on the world energy map as a hot spot for the global energy industry.

A recent PricewaterhouseCoopers report noted that Tanzania’s infrastructure has drawn significant investment over the past several years and predicts that within a decade it will become a leading LNG exporter, supplying markets from East and South Asia, Europe and Latin America, including Pakistan, China, Spain and Chile.

Summing up the current state of events in Tanzania’s hydrocarbon sector, the U.S. government’s Energy Information Administration recently noted, “Tanzania produces small volumes of natural gas for domestic consumption, but the country has the potential to become a liquefied natural gas (LNG) exporter in the future. Tanzania does not produce crude oil, and there has not been a commercial oil discovery in the country recently... The BG Group, with Ophir Energy, and Statoil and in partnership with ExxonMobil, have made several offshore natural gas discoveries since 2010, totaling 25 to 30 trillion cubic feet of recoverable gas resources...”

Tanzania is already one of sub-Saharan Africa's most rapidly growing economies. It has registered strong economic growth for over a decade, with annual GDP increases reaching 7 percent in 2013 and projected to reach 7.3 percent in 2014. 

Related Article: Nigeria Planning Country’s First Nuclear Power Plant

Tanzania’s natural gas deposits have now attracted the attention of a number of major energy companies, including Norway’s state-owned Statoil, Britain’s BG and Ophir Energy and U.S. energy giant ExxonMobil, which are collaborating with the Tanzanian government over constructing an LNG plant. The government favors an on-shore liquefied natural gas plant (FLNG), as opposed to an offshore plant currently being planned by investors in neighboring Mozambique.

Making the domestic energy market more attractive for foreign investors, in late 2013 Tanzania upgraded its 2008 production sharing agreement (PSA), in addition to opening up to tender seven deepwater blocks and one block on Lake Tanganyika. The 2013 model PSA template retained many provisions from the 2008 model, including minimum state participation of 25 percent, additional profits tax, and government royalty, but it also encouraged deepwater exploration by reducing the royalty rate to 7.5 percent from 12.5 percent.

Last month, Tanzania Petroleum Development Corp’s Acting Director of Exploration, Production and Technical Services Emma Msaky told journalists that the government predicted that, by 2016, Tanzania’s natural gas reserves would reach 200 trillion cubic feet. That’s based on offshore exploration at Tachui and Zafarani 3 wells that are expected to provide positive results that will add up to the government’s current estimates of 46.5 tcf from 19 wells that were drilled in the offshore blocs.

Related Article: Eni Considers Building FGLP Off Mozambique Coast

Msaky said, "Judging by the past experience, we should soon expect to have new estimates from the ongoing offshore exploration work.” She added that the government was predicting that commercial production of LNG in Tanzania would begin by 2020 or even earlier if everything went well.

But while Tanzania is in competition with Mozambique to become East Africa's first LNG exporter, politics are affecting the massive foreign investment necessary to bring major LNG projects online, which many analysts believe will be deferred until after scheduled general elections in 2015.

Eurasia Group Africa analyst Clare Allenson observed, "The constitutional review is forcing interest groups to take a stand on all the most divisive political issues [concerning the country’s hydrocarbon resources] at once... In this climate, introducing new terms to govern the nascent natural gas sector will be politically difficult, making passage of a new bill unlikely this year."

Accordingly, Tanzania’s LNG potential is there; it only remains for the government to develop a unified investment legislative code to convince foreign energy majors to finance substantial projects, as the clock is ticking.

 By John Daly of Oilprice.com




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News