Oil and gas discoveries in Tanzania have caught the eye of energy giants Equinor, ExxonMobil, and Shell.
- Tanzania is strategically positioning itself for the commercialization of its energy resources.
- The upcoming Tanzania Energy Congress on September 20-21 will showcase the country’s potential in the sector.
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Tanzania’s vast natural gas reserves have attracted the attention of energy giants Equinor, ExxonMobil, and Shell, marking a significant leap forward in the nation’s economic prospects. With a recent discovery of oil reserves in Wember-Eyasi, Tanzania’s energy landscape is poised for a transformative shift. Analysts note that oil and gas will bolster the country’s position as an emerging player in the global energy sector.
Strategic positioning in global gas market
Mirroring the ambitions of Africa’s top oil-producing nations, such as Nigeria, Algeria, Libya, Angola, and Egypt, Tanzania is strategically positioning itself for the commercialization of its energy resources to fuel both its own industrialization and economic growth.
The discovery of natural gas reserves underscores the potential for a more lucrative trajectory for the industry.
The country’s focus on Liquefied Natural Gas (LNG) has borne fruit. Already comprehensive deals that had been stalled for years are now coming to fruition. Notably, the Host Government Agreement (HGA) signed with a consortium consisting of Shell, ExxonMobil, Equinor, and Ophir Energy in June 2022 marked a crucial milestone.
President Samia Suluhu Hassan said the energy deal has the potential to reshape Tanzania’s economic outlook. “Let’s maintain our country’s interest in every part of the negotiations. Both teams need to be flexible as it should be a give-and-take scenario,” she added.
Tanzania’s LNG potential
Tanzania’s LNG ambitions are align with its strategic goal of attracting investments and gaining a competitive advantage over regional rivals like Kenya, Mozambique, and Uganda. By capitalizing on its geographic location, Tanzania is eyeing profitable markets in Asia and other parts of the world. The country will leverage its infrastructure projects like the Standard Gauge Railway and airport expansions.
While Tanzania has significant untapped natural gas potential, with only 30 percent of the gas-rich areas explored. The government is aiming at enhancing exploration operations. Minister of Energy, January Makamba, says that there is much more to be discovered and harnessed across the nation.
The HGA signed in June 2022 paved the way for further development. The subsequent Front End Engineering and Design operations and the anticipated Final Investment Decision (FID) are vital steps toward realizing Tanzania’s energy ambitions.
This $30 billion deal envisions the establishment of an LNG plant in the southern coastal town of Lindi. The government projects start of operations by 2029-2030.
However, in a recent twist, the government of Tanzania estimated the LNG project’s cost at $42 billion due to technical analysis, emphasizing the importance of careful financial planning and management.
Africa’s share in global LNG market
Tanzania’s endeavors in the natural gas industry align with a broader continental trend. Africa’s share in the global gas market is set to rise from 6 percent in 2021 to over 11 percent by 2050. At the same time, demand for natural gas is expected to increase by 82 per cent during the same period.
The growth of gas supply in Africa could be among the highest globally, driven by the maximal exploitation of local energy resources.
Tanzania’s goal of finalizing the investment decision by 2028 sets it on a path to becoming Africa’s LNG giant. With the backing of international oil companies and its own resources, the nation is poised to harness its gas reserves for economic transformation.
The upcoming Tanzania Energy Congress on September 20-21 will showcase potential developments and technological investments in the oil and gas sector. It will have high-level discussions among top industry players and stakeholders.
According to the organizers, this year the Congress will focus on key updates in Tanzania’s energy sector. These updates span across LNG project negotiations, and EACOP pipeline project updates. The talks will also focus on upstream gas developments, and a number of renewable energy project proposals.
Tanzania Energy Congress Focus Areas
Some of the key topics that will attract panelists include;
— Global Ministerial Panel: Improving Africa’s Economy Through Energy Sector Market
— Development Expansion: The Impacts of the Global Energy Transition on Policy, Strategy and Investment Decisions
— African Leadership Panel: Tanzania & The African Energy Landscape: The Industry’s Approach to Investing and Financing Low-Carbon Energy Infrastructure Projects in Africa
— Local Content Spotlight: Leveraging Local Capacity Building for Long-term Sustainable Growth
— Tanzanian Leadership Panel: The National 5-Year Development Plan: Tangible Demonstration of Sustainability & Social Impact
As Tanzania propels itself onto the global energy stage, its journey promises to be a vital part of the continent’s energy narrative.