The Tanzania LNG project, valued at $42 billion, has reached a critical milestone with the completion of commercial, tax and revenue-sharing negotiations between investors and the government. The project, planned for Likong’o in the Lindi Region, is expected to produce liquefied natural gas for over 35 years. According to Tanzania’s Daily News, the project’s development will support the country’s wider gas strategy, which currently includes domestic production from the Songo Songo and Mnazi Bay blocks, standing at about 170 million cubic feet daily.
The project's legal phase will determine how quickly Tanzania can convert its gas resources into export infrastructure and fiscal revenue. The development would involve Equinor and Shell as joint operators, with ExxonMobil, Pavilion Energy, Medco Energi and TPDC also partnering in the project. The proposed development would tap into Tanzania’s large offshore gas resources, which are estimated to be around 47.13 trillion cubic feet. This scale positions Tanzania among East Africa’s most significant LNG export candidates.
The next critical step for the project is the completion of the Host Government Agreements and legislation governing implementation. Legal teams are currently meeting in Arusha to finalize these agreements, which will then move through government review, ratification and parliamentary approval. These steps must be completed before construction can begin. The transition is crucial for investors, as commercial terms define the project’s economics, while legislation establishes the legal and fiscal framework supporting long-term capital commitments.
Despite the progress made, the project has not yet reached a final investment decision. However, Tanzania’s new LNG law could help clear this remaining hurdle, according to a Reuters report in September 2026. The law is expected to provide a framework for the project’s development and help attract investment. The project’s development will also support Tanzania’s wider gas strategy, which includes expanding domestic gas infrastructure.
TPDC Executive Director Mussa Makame stated that negotiations covering the project’s scale, taxation and revenue sharing ended during the 2025/26 financial year. The legal phase will determine the project's timeline and fiscal framework. The project's success will depend on the completion of the Host Government Agreements, approval of the governing legislation and parliamentary ratification.
The project also creates opportunities for local participation, with Tanzania establishing a team to prepare a Local Content Strategy and Plan for the project. The strategy is expected to cover employment, skills development and business opportunities, and could shape procurement for construction, transport, engineering, catering and maintenance. This approach will ensure that the project benefits the local economy and community.
Meanwhile, Tanzania is expanding its domestic gas infrastructure, with TPDC developing connections for households, industrial users and compressed natural gas stations. The corporation is also examining regional gas links with Kenya, Uganda, Zambia and Mozambique, which would widen the market for Tanzania’s gas beyond LNG exports. The project's immediate investment signal is therefore legal, not physical, with investors watching the legislation, Host Government Agreements and final investment decision.
Key points
- The project’s development will support Tanzania’s wider gas strategy and position the country among East Africa’s most significant LNG export candidates.
- The completion of the Host Government Agreements and legislation governing implementation are critical steps that must be completed before construction can begin.
- The project creates opportunities for local participation, with a focus on employment, skills development and business opportunities.
