• Tanzania plans to sign the legal framework for the $42 billion Tanzania LNG project before June 2026.
• The project targets development of more than 47.13 trillion cubic feet of offshore natural gas.
• Equinor and Shell lead the consortium, alongside ExxonMobil, Pavilion Energy, Medco Energi, and TPDC.

Tanzania plans to sign before June 2026 the agreement governing the restart of the stalled Tanzania LNG project. Kitila Mkumbo, Minister of State for Planning and Investment, announced the timeline in London and confirmed that the parties had completed commercial negotiations and still needed to finalize legal issues.

The project carries an estimated cost of $42 billion, which makes it the largest investment ever planned in Tanzania. The project aims to monetize more than 47.13 trillion cubic feet of offshore natural gas. A consortium led by Equinor and Shell develops the project, with participation from ExxonMobil, Pavilion Energy, Medco Energi, and state-owned TPDC. The negotiations focus mainly on the legal and fiscal framework and the terms of the Host Government Agreement (HGA).

The project stalled after the government proposed changes to a financial agreement concluded in 2023. Although the parties advanced discussions on commercial terms, the project failed to reach a Final Investment Decision (FID).

Authorities estimate that production could start in about eight years. Officials also expect the project to generate more than 100,000 direct and indirect jobs.

A political shift to restore investor confidence

The Tanzania LNG revival aligns with a strategic shift under President Samia Suluhu Hassan. Under former President John Magufuli, who ruled until his death in 2021, Tanzania pursued economic nationalism through forced contract renegotiations, tighter taxation, and challenges to international arbitration. That approach slowed gas negotiations and weighed heavily on investment. Equinor recorded a write-down of about $1 billion on its LNG project due to stalled talks with the state.

Since 2022, the government has sought to rebuild investor confidence. The administration has reduced the risk of unilateral contract renegotiations and promoted a more predictable regulatory framework. Meanwhile, global market conditions support the project. The war in Ukraine and the reshaping of global gas markets have increased interest among energy majors in new export hubs, particularly in East Africa, alongside Mozambique.

The expected signing by June would mark a major political milestone. However, the agreement would not guarantee rapid execution. The project must still secure an FID, arrange financing, and address logistical and security risks, as delays at neighboring Mozambican projects have shown.

For Tanzania, the objective remains twofold. The government seeks to attract long-term foreign capital while ensuring domestic economic benefits, including energy supply for the local market.

This article was initially published in French by Olivier de Souza

Adapted in English by Ange J.A. de BERRY QUENUM