By Nerijus Adomaitis and Shadia Nasralla
OSLO, Nov 4 (Reuters) - Equinor could start
producing liquefied natural gas (LNG) in Tanzania by the end of
this decade if talks with the East African country's government
succeed, a top executive at the Norwegian company said on
Thursday.
The energy company made a series of gas discoveries in
Tanzania's waters during the last decade and recently said it
will revive previously stalled talks on the possible development
of those reserves.
"We are cautiously optimistic and pleased by what they
(Tanzania's government) say," Al Cook, Equinor's head of
international operations, told Reuters.
"If we are successful, we believe we could start this (LNG
production) up by the end of the decade. That would be the
target that we would go for," he said.
Equinor in January wrote off the entire book value of $982
million of its portfolio in Tanzania, citing poor economics. But
global LNG prices have since surged to record highs driven by
strong Asian demand, making the project more attractive.
"We see rising demand for LNG from Asia as a clean
alternative for coal. China during the course of (the) Covid
(pandemic) added as much gas demand as the entire nation of
France," Cook said.
Equinor operates Tanzania's Block 2, which it estimated to
hold more than 20 trillion cubic feet (0.6 trillion cubic
metres) of gas in place, while ExxonMobil also holds a
stake.
Equinor aims to cooperate with Shell on the
project, which operates Block 1 and 4 off Tanzania with some 16
trillion cubic feet in estimated recoverable gas, Cook said.
"I'm very confident that we are aligned with them and that
we can move forward," he added.
Shell's Chief Executive Ben van Beurden spoke with
Tanzania's President Samia Suluhu Hassan about potential
investments in energy projects last month, the company said in
an email to Reuters, declining to elaborate.
Talks with Tanzania's authorities are expected to focus on
fiscal, legal and regulatory frameworks that could enable
companies to make investments, Equinor said.
(Reporting by Nerijus Adomaitis in Oslo and Shadia Nasralla in
London, editing by Terje Solsvik and Susan Fenton)