Equinor writes down Tanzania LNG value

Norway’s Equinor said Friday it decided to write down the book value of its Tanzania LNG project on the company’s balance sheet by $982 million.

The energy firm says it would record this move in adjusted earnings for EPI division in its fourth-quarter results that it plans to issue on February 10.

“While progress has been made in recent years on the commercial framework for TLNG, overall project economics have not yet improved sufficiently to justify keeping it on the balance sheet,” the firm said.

The TLNG project has an anticipated breakeven price “well above the portfolio average for Equinor and is, at this time, not competitive within this portfolio,” it said.

Equinor’s oil and gas projects with expected start-up by 2026 have an average breakeven below $35/bbl based on today’s estimates. Similar for non-sanctioned oil and gas projects with expected start-up within this decade, the average breakeven is below $40/bbl, it said.

The firm added it would continue to engage with the government of Tanzania in negotiations on a commercial, fiscal and legal framework that “may provide a viable business case for TLNG in the future.”

$20 billion LNG development

The Norwegian firm has with partner ExxonMobil discovered more than 20 trillion cubic feet of gas in Block 2 offshore Tanzania.

It began drilling in the offshore Block 2 in 2011, with a total 15 exploration wells resulting in nine discoveries.

This gas should feed the proposed Tanzania LNG export project but the long-delayed development has never seen the light of the day.

Furthermore, the firm previously said that the Block 2 gas would go to a liquefaction plant in Lindi with a potential capacity of 7.5 million tonnes per year.

Equinor expected the cost to build such a project to reach about $20 billion.

In addition, the firm started negotiations with the Tanzania government back in 2018 to set out the commercial and fiscal framework for the LNG project.

- Advertisements -

Most Popular

Cedar LNG FID pushed back

Canada’s Pembina Pipeline and the Haisla Nation have again postponed a final investment decision on their Cedar floating LNG...

Eni to ship Congo’s first LNG cargo

Italy’s Eni will soon ship the first liquefied natural gas cargo from its Tango floating LNG facility moored in...

Hyundai Samho to build LNG carrier quartet for $1.08 billion

South Korea's Hyundai Samho has secured an order to build four liquefied natural gas (LNG) carriers for about $1.08...

More News Like This

Equinor seals 15-year LNG supply deal with India’s Deepak Fertilisers

Norway's Equinor and India's Deepak Fertilisers have signed a 15-year deal for supplies of liquefied natural gas (LNG) with...

K Line charters third LNG-powered LCO2 carrier from Northern Lights JV

Japan’s shipping giant K Line has entered into a charter contract with Norway’s Northern Lights, a joint venture consisting...

Equinor to deliver reloaded cargo from Lithuania’s Klaipeda to Finland

Norwegian energy firm Equinor has reloaded a liquefied natural gas cargo at the KN Energies-operated FSRU-based terminal in Lithuania's...

Norway’s Equinor awards Hammerfest LNG contract

Norway’s Equinor and its partners in the 4.3 mtpa Hammerfest LNG export plant have awarded a contract related to...