For more than a decade, Tanzania has sat atop one of Africa’s largest untapped natural gas reserves. Now, after years of false starts, regulatory disputes and political upheaval, the East African nation is on the cusp of unlocking that potential through what would be its largest-ever foreign investment.
Tanzania expects to sign agreements before June for a $42 billion liquefied natural gas plant that could transform the country into a major energy exporter and create more than 100,000 jobs, according to Kitila Mkumbo, the minister of state for planning and investment, who announced the timeline during a briefing in London on Monday.
“We have basically concluded the commercial discussions. We are now only discussing the legal framework of this agreement,” Mkumbo told investors. “The deal is done and we expect this to be signed before June.”
The announcement marks a significant milestone for a project that has been stalled repeatedly since exploration began in earnest more than 15 years ago. If realized, the mega-project would unlock 47.13 trillion cubic feet of natural gas deposits off Tanzania’s southern coast and position the nation alongside neighboring Mozambique as an emerging LNG export hub serving Asian markets.
A Decade of Delays
The project’s troubled history reflects the complex interplay of politics, economics and competing national interests that often characterize major energy developments in Africa.
Norwegian energy giant Equinor and its partner ExxonMobil discovered more than 20 trillion cubic feet of gas in Block 2 offshore Tanzania beginning in 2011. Shell, meanwhile, controls approximately 16 trillion cubic feet across Blocks 1 and 4. Together with partners including Pavilion Energy, Medco Energi and Tanzania’s national oil company TPDC, the consortium has spent years negotiating terms with successive Tanzanian governments.
A preliminary Host Government Agreement was signed in June 2022 under President Samia Suluhu Hassan, who described the LNG project as “massive and strategic” with potential to generate significant capital and revenue. But progress stalled again in 2023 when the government proposed changes to the financial framework that had been tentatively agreed upon.
According to Mkumbo, the parties have now resolved those commercial disagreements. What remains are legal technicalities — a specialized framework required for what is Tanzania’s largest-ever investment project.
The proposed facility at Likong’o in the Lindi Region would have a production capacity of at least 10 million tonnes of LNG annually. With global LNG demand projected to rise more than 25% between 2022 and 2030, driven by Asia and Europe’s energy diversification efforts, Tanzania officials believe the timing for such a project has never been better.
Political Crisis Complicates Path Forward
The minister’s optimistic assessment comes against a backdrop of severe political turmoil that has shaken Tanzania’s international standing and complicated efforts to finance the country’s ambitious infrastructure agenda.
Tanzania held presidential elections on Oct. 29, 2025, that plunged the nation into its worst political crisis in decades. Hassan was declared the winner with 97.66% of the vote after her two main challengers were barred from running. Opposition leader Tundu Lissu faced treason charges, while another candidate, Luhaga Mpina, was disqualified on technical grounds.
The election sparked unprecedented protests, met with a violent government crackdown that included an internet blackout and nationwide curfew. The main opposition party, Chadema, has claimed that more than 1,000 people were killed by security forces, though independent verification has proved impossible given the communications restrictions and government control of information.
Hassan’s government disputes those casualty figures but has not provided its own official count. In November, facing mounting international pressure, Hassan announced plans for an inquiry commission to investigate the post-election deaths.
The United Nations human rights chief, Volker Türk, urged Tanzanian authorities to investigate the killings and other rights violations, noting that “harrowing reports have emerged of families desperately searching everywhere for their loved ones.”
Financial Fallout
The diplomatic consequences have been swift and substantial. According to Mkumbo, international partners — mainly European nations — withheld between $2 billion and $3 billion of Tanzania’s $10 billion annual development budget, including concessional loans and other budget support, in response to the election violence.
The European Parliament urged the withdrawal of €156 million ($181 million) in aid to Tanzania, citing governance concerns. Canada, Norway and the United Kingdom issued a joint statement expressing concern about “credible reports of a large number of fatalities and significant injuries” and noting that the run-up to elections “was marked by harassment, abductions and intimidation of opposition figures, journalists and civil society actors.”
Facing this funding crisis, Hassan’s administration has turned to an unconventional solution: selling gold reserves. Mkumbo revealed Monday that President Hassan has instructed Tanzania’s central bank to sell some of its gold holdings to raise cash for infrastructure projects.
“We need cash. We have a lot of infrastructure projects that are going on and they need funding, so they have been instructed to sell part of it so that we get money for the infrastructure,” Mkumbo said.
The timing could hardly be better from a market perspective. Gold prices surged to record levels above $5,100 per ounce on Monday as investors sought safe havens amid international political tensions.
The Bank of Tanzania has been steadily building its gold reserves as part of a national strategy launched in 2022 to reduce reliance on external borrowing and strengthen financial independence. Tanzania’s gold reserves stood at approximately $6.2 billion as of recent reports, accumulated through a program requiring mining companies to sell 20% of their gold production to the central bank.
Strategic Importance Beyond Borders
Despite the political uncertainty, international energy companies appear committed to the LNG project, viewing Tanzania’s gas reserves as too valuable to abandon.
Tanzania’s total recoverable gas resources are estimated at 57 trillion cubic feet, positioning the country to become a regional LNG hub. The International Energy Agency projects global LNG demand will increase by more than 25% between 2022 and 2030, driven primarily by Asian markets seeking to diversify energy sources and European nations reducing dependence on Russian gas.
The planned facility would serve as a crucial link in global energy supply chains at a time of unprecedented volatility. Russia’s invasion of Ukraine exposed Europe’s vulnerability to energy dependence, while climate commitments have accelerated the shift away from coal, making natural gas a key transition fuel.
For Tanzania, the economic stakes are enormous. Government officials estimate the project could boost GDP by billions of dollars annually, improve the balance of payments, attract foreign direct investment and reduce reliance on imported fuels. An abundant domestic gas supply could also support industrialization in energy-intensive sectors such as manufacturing and agro-processing.
President Hassan has emphasized that while the project is national in scope, benefits should first flow to communities in the Lindi and Mtwara regions where the gas is located and the infrastructure will be built. This insistence on local benefit-sharing reflects lessons learned from neighboring countries where resource extraction has sometimes left communities near production sites impoverished despite national wealth creation.
Regional Competition and Precedent
Tanzania’s LNG ambitions unfold in the shadow of Mozambique’s troubled experience with similar projects. Mozambique holds even larger gas reserves but has struggled with insurgent violence in the gas-rich Cabo Delgado province that has repeatedly delayed development of LNG facilities there.
TotalEnergies suspended work on its $20 billion Mozambique LNG project in 2021 following insurgent attacks, though operations have since partially resumed. The violence has provided Tanzania with both a warning and an opportunity — demonstrating the security challenges that can derail major energy projects while positioning Tanzania as a potentially more stable alternative for investors.
If both countries successfully develop their gas resources, East Africa could emerge as a major LNG export region, competing with established producers in the Middle East, Australia and the United States for Asian market share.
Timeline and Technical Challenges
Under the current timeline, Tanzania would sign final agreements by June 2026, clearing the way for a Final Investment Decision by project partners. Mkumbo indicated that production could begin within eight years of signing, suggesting first LNG exports around 2034.
That timeline, while ambitious, reflects the massive scale and complexity of LNG projects. The facility would require construction of offshore platforms, subsea pipelines spanning dozens of kilometers, an onshore liquefaction plant, and associated infrastructure including roads, power supply and worker housing.
The $42 billion price tag makes it one of Africa’s largest-ever infrastructure projects. Financing such a venture typically requires a consortium of international banks, export credit agencies and development finance institutions willing to commit funds for decades-long payback periods.
Technical challenges abound. The gas sits in deepwater blocks requiring sophisticated offshore drilling and production platforms. The liquefaction process itself demands cutting-edge technology to cool natural gas to minus 162 degrees Celsius (minus 260 degrees Fahrenheit), reducing its volume for efficient shipping.
Environmental concerns must also be addressed. LNG projects face scrutiny from climate activists who argue that locking in decades of gas production contradicts global commitments to reduce greenhouse gas emissions. Project partners will need to demonstrate robust environmental safeguards and potentially offset emissions to satisfy increasingly stringent investor criteria.
Uncertain Path Ahead
Whether Tanzania can maintain momentum toward the June signing deadline remains uncertain. The country faces multiple headwinds: ongoing political tensions, damaged international relationships, a constrained government budget and the inherent complexity of negotiating multi-billion dollar contracts involving multiple international parties.
Regional observers note that Tanzania’s recent history suggests cause for both optimism and caution. Hassan came to power in 2021 after the death of her predecessor, John Magufuli, and initially earned praise for reopening democratic space and engaging more constructively with international partners. The October 2025 election crisis has undone much of that goodwill.
“Tanzania’s ability to finalize this agreement will depend not just on technical and commercial terms, but on whether international partners believe the government can provide long-term stability and honor commitments over decades,” said one Western diplomat speaking on condition of anonymity due to the sensitivity of ongoing negotiations.
For ordinary Tanzanians, the project represents both hope and skepticism. Many welcome the promise of jobs and economic development, particularly in the southern coastal regions that have historically lagged behind more prosperous areas. But others question whether revenues will be managed transparently and whether benefits will reach communities or be captured by political elites.
The LNG project also fits into Hassan’s broader Vision 2050 development strategy, which aims to transform Tanzania into a trillion-dollar economy through industrialization, infrastructure investment and foreign direct investment. Critics argue that achieving such ambitious goals requires the political stability and good governance that recent events have called into question.
As the June deadline approaches, all eyes will be on whether Tanzania can navigate its current challenges to finalize agreements with Equinor, Shell and their partners. Success would mark a turning point for East Africa’s energy sector and potentially alter global LNG supply dynamics for decades to come.
Failure, meanwhile, would represent another missed opportunity for Tanzania to leverage its natural resources into broad-based economic development — and would likely prompt international energy companies to redirect investments to more stable jurisdictions.
The next five months will reveal whether Tanzania’s political will can match its geological fortune.
