LAGOS, Aug 26 – Equinor says disruptions to energy flows through the Strait of Hormuz have strengthened the case for developing Tanzania’s long-stalled liquefied natural gas project, as geopolitical risks reshape the global LNG market.
The Norwegian energy company has been negotiating investment terms with Tanzania for years over the proposed development, which is expected to cost about $42 billion, according to estimates from the Tanzanian government. The project would develop one of East Africa’s largest known gas resources and create an LNG export hub capable of supplying customers in Asia.
The renewed interest comes as conflict involving Iran has disrupted energy flows through the Strait of Hormuz, a critical route for global oil and gas shipments. The disruption has highlighted the vulnerability of LNG supplies from Qatar and other Gulf producers and increased the value of projects located outside the region.
Philippe Mathieu, Equinor’s head of international operations, said the changing market conditions could provide an additional reason to accelerate the Tanzanian development. “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,” Mathieu told reporters at an energy conference in Norway on Tuesday.
Asked whether the disruption to Middle Eastern LNG had made the Tanzania project more attractive, Mathieu said: “Exactly. It means you are producing LNG in an area which is not exposed to these kinds of geopolitical challenges.”
The Tanzanian project has been under development for more than a decade but has repeatedly faced delays as investors and the government worked through detailed investment terms and conditions. The proposed development would unlock an estimated 47.13 trillion cubic feet of natural gas resources.
Equinor and Shell are joint operators of the project, with Exxon Mobil, Pavilion Energy, Medco Energi and Tanzania Petroleum Development Corporation (TPDC) also participating.
For Tanzania, the project represents a potentially transformative investment in the country’s natural gas industry, while an LNG export facility would provide a new source of export earnings and connect Tanzania more directly with Asian energy markets.
The shifting global LNG landscape could strengthen the commercial argument for bringing the project forward. Buyers increasingly seeking supply diversification may place greater value on production from regions that are geographically removed from the Middle East and its associated geopolitical risks.
However, the project still faces the challenge that has delayed it for years: reaching agreement on the investment framework required to move from negotiations to construction. The strategic case for Tanzanian LNG may have strengthened, but a final investment decision will depend on the outcome of those long-running discussions.
Equinor is also pursuing exploration opportunities elsewhere in Africa. Mathieu said the company is hoping to make a “pretty big” oil discovery in Namibia’s PEL 90 exploration licence, potentially matching major discoveries made nearby by TotalEnergies and Galp.
Equinor said last week that it had acquired a 17.4% interest in the Chevron-operated prospect, with exploration drilling expected later this year.
