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Statoil and ExxonMobil compare Tanzania LNG development concepts

KBR completed Tanzania LNG project pre-FEED

Since KBR completed the pre front end engineering and design (pre-FEED) work, the Norwegian national oil company (NOC) Statoil and the International oil company (IOC) ExxonMobil are comparing the best concepts to develop the giant liquefied natural gas (LNG) project based on the offshore Tanzania Block-2 natural gas discoveries Zafarani, Lavani and Tangawizi.

Since 2007, Statoil and ExxonMobil are exploring the Block-2 in the Indian Ocean with a Production Sharing Agreement (PSA) signed with the state-owned Tanzania Petroleum Development Cooperation (TPDC) company.

Statoil_Exxon_Tanzania-LNG_Block2_MapLocated at the southern limits of the Tanzania water with Mozambique, the Block-2 is divided in two separated areas distant respectively of 100 and 200 kilometers from the shore and lying in deep water ranging between 400 and 3,000 meters water depth because large canyons.

Based on the Production Sharing Agreement, Statoil and ExxonMobil hold the respective stakes in the Tanzania Block-2 at the exploration stage:

 – Statoil 65% is the operator

 – ExxonMobil 35%

Since Statoil and ExxonMobil are willing to enter the commercialization phase of the Tanzania LNG project, the national oil company (NOC) shall take 10% share in respect with the Production Sharing Agreement. 

On first quarter 2012,  Statoil drilled successfully the Zafarani-1 well by 2,600 water depth and 5,100 meters total depth to estimate the recoverable resources to 5 trillion cubic feet (tcf) of natural gas.

Then Statoil and ExxonMobil compiled exceptional discoveries with the Lavani and Tangawasi wells.

Tanzania Government requires onshore LNG plant

On this base, Statoil and ExxonMobil estimate the Block-2 in-place reserves between 15 and 17 tcf of natural gas.

Anyway, the Tanzania LNG project partners are planning appraisal wells to confirm these numbers and additional exploratory wells in prospect zones.

Based on the pre-FEED recommendations submitted by KBR in October 2012, Statoil and ExxonMobil are considering all the scenarios to develop this complex Block-2.

KBR_pre-FEED_LNG_PlantFor the offshore part of the Tanzania LNG project, Statoil and ExxonMobil are comparing two options:

 – An advanced all subsea-to-shore solution

 – A conventional floating production and storage unit (FPSU) with a pipeline to shore.

For the onshore part, Statoil and ExxonMobil intend to phase up a two LNG trains plant.

As in Mozambique, the Tanzania Government is asking the Block-2 partners, Statoil and ExxonMobil, to team up with the other companies, BG Group (BG) and Ophir Energy (Ophir), exploring the Block-1, Block-3 and Block-4 in order to optimize infrastructures.

Both Government also call to maximize the local content and work on their respective regulation scheme to retain the best value from the foreign investments.

In this context Statoil and ExxonMobil are planning to finalize the Tanzania LNG project concept on third quarter 2014 with the FEED work due to start on first half 2015.

On this time frame and assuming that in the meantime the Tanzania Government released its new energy regulation, Statoil and ExxonMobil expect to make the final investment decision (FID) on second half 2016 to award the engineering, procurement and construction (EPC) contract in following and ship first vessels from the Tanzania LNG plant by 2021.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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