Tanzania says the cost of developing its liquefied natural gas (LNG) project is 42 billion dollars, following recent technical analysis. Next month the country is expected to sign an exploration agreement and begin the front-end engineering design of what will become the largest energy project in southern and eastern Africa.

Initially, the project, located off the coast, was estimated at around 30 billion dollars, but some recent industry reports point to 40 billion dollars.

The Permanent Secretary of the country's Ministry of Energy, Felchesmi Jossen, said that the latest technical analysis shows that offshore drilling and piping will boost the project to 42 billion dollars.

Jossen was speaking in Kampala, on the sidelines of the 10th East African Petroleum Conference and Exhibition, where Tanzania presented 26 more exploration areas, both onshore and offshore, which will be up for tender by the end of the year, in the country's first licensing round since 2013 to search for more hydrocarbons.

The Final Investment Decision that will put the country at the top of energy project development on the continent will be taken in 2028. The country will develop 57.54 trillion cubic feet of gas discovered so far, with international oil companies Shell and Norway's Equinor as the main partners, and the participation of the Tanzania Petroleum Development Corporation (TPDC).

In March, Energy Minister January Makamba said that negotiations on the project had been concluded and that contracts were being drawn up, including an agreement with the host government (HGA) and another on the association of Blocks 1, 2 and 4. Shell operates Blocks 1 and 4, while the Norwegian company Equinor operates Block 2.

After the signing of the HGA, engineering feasibility studies will begin and the final results are expected after two years. This will lead to the FEED, which should take another three years.

Construction of the project will take three years and memoranda have already been signed with Nigeria and Uganda to buy the LNG that will be produced in the country.

Tanzania has 810 km of natural gas network planned for construction. The country has 2,000 households already connected to the natural gas infrastructure, while 62% of its 1100 MW installed electricity capacity is generated from natural gas from onshore sources developed at the Songo Songo and Mnazi Bay power projects.

Of its 57.54 trillion cubic feet of natural gas reserves, only 650 million cubic feet a day are being produced.