The proposed LNG project, which would monetise some of the continent’s largest undeveloped offshore gas reserves, has been stalled for more than a decade by regulatory uncertainty and complex negotiations with international oil companies. If concluded, it would mark a major turning point for Tanzania’s energy sector and potentially reshape its wider economy.
Speaking on the sidelines of India Energy Week in Goa, Deputy Minister for Energy Salome Makamba said the government expects to complete negotiations before June 2026. Production is projected to begin around eight years later, reflecting the project’s scale and technical complexity.
The venture is structured as a joint development between the state-owned Tanzania Petroleum Development Corporation and a consortium of international energy companies. Shell and Equinor are joint operators, with ExxonMobil among the partners. Once developed, the LNG facility would tap more than 47 trillion cubic feet of offshore gas, drawn from total national reserves estimated at over 54 trillion cubic feet.
What does this mean for Tanzania?
For Tanzania, the stakes extend well beyond export revenues as analysts say the LNG project represents a strategic bet on natural gas as a long-term driver of foreign exchange earnings, industrialisation, and energy security.
Makamba told investors that the government is focused on creating an enabling environment for large-scale energy investment. She pointed to new seismic surveys in the Eyasi Wembere, Lindi, and Mtwara blocks, as well as efforts to expand domestic gas infrastructure for industrial users and households.
Tanzania’s gas potential has long attracted global attention, with companies such as BG Group (now part of Shell), Petrobras, and Ophir Energy among the early explorers drawn by large offshore discoveries. Yet despite early promise, commercial development has lagged, reinforcing investor perceptions of risk.
Structural challenges continue to shape those concerns. Policy inconsistency, regulatory complexity, infrastructure gaps, and governance weaknesses have all contributed to repeated delays. While Tanzania has established a legal framework for managing its oil and gas sector, academic and industry assessments indicate that implementation remains uneven.
A 2025 sector analysis noted that overlapping regulatory mandates and discretionary decision-making continue to undermine investor confidence, slowing approvals and increasing project risk. Local content rules, designed to ensure Tanzanians benefit from major energy investments, have also proved difficult to implement in practice due to skills shortages, limited technical capacity, and bureaucratic bottlenecks.
Investors vs structure
For international investors, uncertainty lies less in the existence of regulations and more in how they will be applied over the lifespan of a multi-decade project.
Energy analysts argue that finalising the LNG deal alone will not be enough. They say deeper institutional reform will be critical, including strengthening regulatory independence, improving transparency in contract management, and clarifying the national oil company’s role to reduce conflicts between policy and commercial objectives.
At the same time, Tanzania is navigating the global energy transition. Government officials frame natural gas as a transition fuel that can support development while financing investment in renewables.
With negotiations entering what officials describe as a decisive phase, the coming months will test whether Tanzania can finally translate its vast gas resources into commercial reality.
For investors, the outcome will serve as a broader signal of the country’s investment climate. Success could reposition Tanzania as a major player in Africa’s gas sector. Failure would deepen doubts about its ability to deliver mega projects, despite its undeniable resource wealth.
