LNG project on the right track: director

Development of deep-water gas resources is one of the most capital-intensive businesses in the world (even more capital-intensive than developing oil resources). This means that to achieve a competitive project with maximum benefits for the country and investors, we need to build a facility that has “economies of scale”. The gas resources discovered in the Tanzanian deep water are sufficient for one world-scale project, and therefore it is our strong view that we should develop a single LNG project. Other solutions would be suboptimal. Perhaps a good analogy is to look at the EACOP [East African Crude Oil Pipeline] project which will be constructing a large heated pipeline running from Uganda to Tanga. It would be possible to replace that pipeline by two pipelines of half the size, but that would be much more costly. That cost has to be recovered, meaning less net income and therefore much less revenue for the two host governments.

LNG project on the right track: director

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