Tanzania is renewing efforts to conclude a long-delayed US$42bn liquefied natural gas (LNG) investment agreement with major global energy companies by mid-2026, part of a broader strategy to position the country as a leading energy export hub in East Africa. The announcement comes amid renewed momentum in negotiations with international partners after years of regulatory uncertainty and stalled talks.
The offshore LNG project, one of Africa’s largest planned energy developments, involves a consortium led by Shell and Equinor in partnership with the Tanzania Petroleum Development Corporation (TPDC). Other participating energy firms include ExxonMobil, Pavilion Energy and Medco Energi. Once developed, the facility is expected to tap into more than 47 trillion cubic feet of natural gas from offshore reserves, out of total national holdings estimated at over 54 trillion cubic feet.
Tanzania’s Deputy Minister for Energy, Salome Makamba, told investors that the government is targeting completion of negotiations before June 2026, with the final agreement laying the groundwork for front-end engineering and design steps ahead of a final investment decision. Production could begin approximately eight years after signing, reflecting the project’s technical complexity and long lead times.
Officials say the LNG project could have transformational effects on Tanzania’s economy, driving export revenues, supporting industrial growth and enhancing energy security. It comes as the country seeks to diversify beyond traditional sectors and leverage its abundant energy resources to attract foreign capital and boost economic competitiveness.
Local projections suggest the LNG plant could generate thousands of construction and permanent jobs, support skills development, and expand domestic infrastructure, particularly in the Lindi and Mtwara regions, where key facilities are planned. In Lindi alone, preparatory work including land compensation and project design planning has already been completed, underscoring progress toward implementation.
However, investor confidence has been tempered by lingering regulatory and governance concerns. Analysts point to historical delays linked to disagreements over fiscal terms and tax incentives, weak institutional coordination and bureaucratic hurdles that have complicated earlier negotiations. There are calls for stronger regulatory clarity, improved transparency and robust contract management to ensure the long-term viability of the LNG venture and broader energy sector reforms.
Tanzania’s government meanwhile is framing natural gas as a transition fuel that can finance broader development objectives while supporting renewable energy investments in the future. Critics caution that reliance on large fossil fuel projects carries risks amid the global energy transition toward cleaner sources, but proponents argue that strategic execution and diversification can help balance economic growth with sustainability goals.
With negotiations entering a decisive phase, the coming months will be key in determining whether Tanzania can finally turn its vast gas reserves into commercial reality. A successful deal could reposition the country as a major LNG exporter and an anchor of East Africa’s energy landscape; failure, analysts say, would reinforce doubts about the country’s ability to deliver on large-scale infrastructure projects despite abundant natural resources.
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