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Tanzania Says Construction Of Long-Awaited LNG Plant To Start In 2022

Tanzania has announced that construction will finally begin on its much-delayed LNG plant in 2022, Tanzania’s energy minister said on Tuesday according to Reuters—the latest in Tanzania’s goalpost moving for the massive LNG project.

The news comes side by side another important announcement for Tanzania—that of its oil pipeline that will move oil between Tanzania and Zambia, the latter of which imports most of its petroleum that it uses.

The $30 billion LNG plant has experienced significant delays due to regulatory issues to determine the legal, fiscal, and commercial terms for the project, as well as low LNG prices. Major international companies have been exploring for gas offshore Tanzania, including Equinor, Exxon, and Shell and have found sufficient quantities for a potential LNG plant.

 The LNG plant is planned for the Lindi region, and will be spearheaded by Shell, Exxon, Ophir, and Pavilion, with an expected completion date of sometime in 2028. The plant will have a 10 million tonnes per annum capacity, the energy minister said, and will open up avenues for Tanzania to export its LNG.

Tanzania has stated in the past that it was eager to “beat Mozambique to secure markets in Japan and South Korea.” If Mozambique were to beat Tanzania to market, this project could be worthless, Tanzania’s previous energy minister said in 2017.

The LNG project was originally supposed to have reached an agreement with international companies sometime in 2018.

For the oil pipeline, the project is expected to cost $1.5 billion, the energy minister said, according to Reuters, although the details for this project have not yet been made available, including when the project will begin, and how it will be financed, other than it is expected to be a joint project between Zambia and Tanzania.

By Julianne Geiger for Oilprice.com

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