Tanzania is preparing to sign its long-awaited $42 billion liquefied natural gas (LNG) export agreement before June, a move officials describe as a turning point for one of Africa’s most ambitious energy projects. After more than a decade of delays, negotiations with international oil and gas companies have reached the final legal stage.
Government representatives say all major commercial terms have been agreed, leaving only the completion of legal documentation before the deal can be formally signed. The breakthrough reflects renewed efforts by the administration to attract large-scale foreign investment into the country’s energy sector.
If concluded on schedule, the agreement will unlock Tanzania’s vast offshore gas reserves and position the country as a new exporter in global LNG markets. It would also elevate East Africa’s role in international energy supply at a time when countries are competing intensely for secure gas sources.
Minister of State for Planning and Investment, Kitila Mkumbo, confirmed at an investment forum in London that negotiations on the commercial framework had been finalised. He expressed confidence that the host government agreement and supporting contracts would be ready for signing before the end of June.
The project is led by a consortium of major energy firms, with Norway’s Equinor and the UK’s Shell serving as joint operators. Other partners include Exxon Mobil, Pavilion Energy, Indonesia’s Medco Energi, and Tanzania’s state-owned Tanzania Petroleum Development Corporation (TPDC).
Together, the group plans to develop more than 47 trillion cubic feet of natural gas discovered in deep-water blocks off Tanzania’s southern coast. The plan includes subsea wells, offshore facilities, pipelines, and an onshore LNG plant near the coastal town of Lindi.
At an estimated cost of $42 billion, the development would be the largest foreign investment in Tanzania’s history. Officials estimate that actual LNG production could begin about eight years after signing, following a final investment decision and full construction phase.
Past delays were largely linked to disagreements over taxation, revenue sharing, and local content rules. Although an initial understanding was reached in 2023, the government later pushed for revised fiscal terms to increase state benefits and domestic participation. Those issues have now been resolved under President Samia Suluhu Hassan’s reform agenda.
Authorities believe the project could generate tens of thousands of jobs during construction and several thousand permanent roles after operations begin. Beyond employment, it is expected to boost export earnings, improve infrastructure, and strengthen the country’s foreign exchange position.
Tanzania’s progress comes as East Africa becomes a new focal point for LNG investment. While Mozambique has started exports, security challenges have slowed expansion there. Analysts say Tanzania’s political stability and resource size could make it a strong competitor for Asian LNG markets in the coming decade.
Despite acknowledging current fiscal pressures, including plans to sell part of the country’s gold reserves to fund infrastructure, officials insist the LNG project remains central to Tanzania’s long-term economic transformation strategy.
