Tanzania is nearing a $42 billion agreement to develop its liquefied natural gas (LNG) resources, with the government expecting to conclude outstanding legal arrangements in the coming months, a move that could position the East African country as a major gas exporter.
Finance Minister Khamis Mussa Omar disclosed this to Reuters on 13 October 2026, saying negotiations on the long-delayed project were approaching completion.
The proposed investment aims to develop Tanzania’s estimated 47.13 trillion cubic feet of natural gas resources and establish an LNG export facility in the southern coastal region of Lindi.
The project is led by Norway’s Equinor and Shell, with ExxonMobil, Pavilion Energy, Medco Energi and the state-owned Tanzania Petroleum Development Corporation (TPDC) also participating.
Although most of the gas is intended for international markets, part of the production is expected to meet domestic demand.
The negotiations have progressed beyond commercial and fiscal discussions, leaving the completion of legal agreements as a major outstanding requirement.
In September 2026, TPDC Managing Director Mussa Makame identified the legal arrangements as a key obstacle to advancing the project, following progress on commercial and fiscal terms.
The next major steps include concluding the Host Government Agreements, securing parliamentary ratification and obtaining a Final Investment Decision (FID) from the project partners.
These milestones must be completed before the development can proceed towards construction. Despite the latest progress, the final agreement and investment commitment have yet to be confirmed.
For Tanzania, the proposed $42 billion investment offers an opportunity to develop its offshore gas resources, increase export earnings and attract long-term foreign investment.
The project could also generate employment and business opportunities for local contractors, service providers and related industries. However, the extent of these benefits will depend on the final contractual arrangements, the participation of domestic businesses and how effectively the government manages future gas revenues.
The development also aligns with Tanzania’s plans to expand electricity generation and industrial capacity.
The government is targeting 8,000 megawatts of electricity generation capacity by 2030 and aims to raise the contribution of energy sources it classifies as clean, including hydropower, solar, wind and natural gas, to about 75 per cent.
Beyond its domestic economic prospects, the LNG project could strengthen East Africa’s presence in international energy markets by adding a major potential source of natural gas exports.
Tanzania is also preparing to facilitate Uganda’s planned first oil exports through the port of Tanga in early 2027, further supporting its ambition to become a regional energy transport and export hub.
