Equinor Will Not Move Forward With Tanzania LNG Project. Writes Off $982 Million.

Equinor announced yesterday it is halting plans for an LNG exporter terminal in Tanzania.  The company noted progress has been made in recent years on the commercial framework for Tanzania LNG, but overall project economics have not yet improved sufficiently to justify keeping it on the balance sheet.

The project currently has an anticipated breakeven price well above the portfolio average for Equinor. At this time, it is not competitive within this portfolio. Equinor noted it will continue to engage with the government of Tanzania in negotiations on a commercial, fiscal and legal framework. There may be a viable business case for Tanzania LNG in the future.

Equinor will write down the book value of the project on the company’s balance sheet by 982 million USD. This will be reflected in adjusted earnings in the fourth quarter 2020 results to be reported on 10 February 2021.