LONDON, Tanzania: Tanzania is close to signing a $42 billion agreement to revive a long-delayed liquefied natural gas (LNG) project, a move expected to unlock the country’s vast offshore gas reserves and generate substantial economic benefits.
Investment Minister Kitila Mkumbo said in London on Monday that commercial negotiations with energy companies, including Norway’s Equinor, Shell, and Tanzania’s state-owned TPDC, have been completed. A construction agreement is expected to be signed before June, with gas production projected to begin in about eight years.
The LNG processing plant, to be built along Tanzania’s southern and coastal regions, is expected to develop more than 47 trillion cubic feet of natural gas, positioning Tanzania among Africa’s largest gas producers and exporters.
While details of project financing remain under discussion, the government has indicated it may mobilise domestic resources, including partial sales of gold reserves, after some international development funding stalled following last year’s election unrest.
LNG is a versatile energy source used in electricity generation, industrial operations, domestic heating, and as fuel for heavy-duty vehicles. Analysts say the project could create over 100,000 jobs, generate long-term export revenue, and catalyse investments in ports, roads, and skills development.
“The LNG project is not just about energy; it is about transforming Tanzania’s economy and improving livelihoods,” Mkumbo said.
Originally slated to begin construction in 2023, the project was delayed as the government refined financing arrangements. Once operational, the plant, together with similar LNG projects in Mozambique, could help establish East Africa as a leading regional gas export hub.
The Tanzanian government views the initiative as a cornerstone for national development, supporting infrastructure, industry, and workforce growth while attracting foreign direct investment.
Across Africa, large-scale energy projects are increasingly being used to drive economic growth and strengthen state revenues, and Tanzania’s LNG venture is expected to place the country at the forefront of this trend.
