Norway’s Equinor and UK based Shell Plc have concluded negotiations on key agreements on the Tanzanian LNG development with the Government.
“Subject to successful completion of the assurance process over the coming weeks”, says Jared Kuehl, Shell’s Vice President and Country Chair for Tanzania, “we anticipate signing a Host Government Agreement (HGA) that covers the onshore elements of the project, and a Production Sharing Agreement (PSA) that oversees its upstream component”.
Unni Fjaer, Managing Director of Equinor Tanzania, notes: “Negotiations on key agreements between the international energy companies (IECs) and the Tanzanian government are now concluded, and the documents are now subject to final reviews and approvals before their expected signing in the following weeks”.
Shell’s Kuehl describes the update as “a significant milestone, on the long path to realising such a major project like Tanzania LNG, with the next steps involving a period of time of detailed engineering design work”. He says that Equinor and Shell, “as joint operators, are pleased with the steps forward and remain focused on continuing to work together with our partners (ExxonMobil, MedcoEnergi and Pavilion Energy), TPDC and of course the Government of Tanzania.”
Equinor’s Fjaer thanks “the Tanzanian government, the negotiating team from Equinor, Shell, ExxonMobil, Medco, Pavilion and TPDC for their hard work throughout this process”. She adds that the end of negotiations “paves the way for the series of milestones that need to follow to realize this fantastic LNG opportunity for the country and the world.”
The deal will allow the two European E& P giants to start engineering work on a project that will pump over 1.5Billion cubic feet per day of gas in three deepwater blocks to a 10Million-15Million tonne per annum LNG plant on the Indian Ocean coast town of Lindi.