Tanzania expects to sign $42 billion mega LNG project before June, minister says
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Tanzania expects to sign before June an agreement for its stalled $42 billion liquefied natural gas project, with production expected to start in eight years, a senior government minister said on Monday. The project is operated jointly by Equinor and Shell and is expected to unlock 47.13 trillion cubic feet of natural gas, with Exxon Mobil, Pavilion Energy, Medco Energi and Tanzania’s national oil company TPDC also involved as partners.
The development had been stalled by proposed government changes to a financial agreement reached in 2023, the minister said. Along with projects in neighbouring Mozambique, Tanzania’s LNG plans could help position East Africa as an emerging LNG export hub to Asia.
Kitila Mkumbo, Tanzania’s minister of state in the president’s office for planning and investment, said commercial discussions were essentially concluded and the remaining focus was finalising the legal framework. He said the project required a specific legal framework because it would be the country’s largest-ever investment project, adding that the deal was expected to be signed before June and create more than 100,000 jobs.
Mkumbo also said President Samia Suluhu Hassan instructed the central bank to sell part of its gold reserves to raise cash for infrastructure funding. He said Tanzania had many infrastructure projects under way that needed financing, while gold prices were trading at record highs above $5,100 as investors sought safe-haven assets amid global political tensions.
The comments come as some bilateral partners have reviewed Tanzania’s financial support following unrest surrounding last year’s election, which the minister described as the country’s biggest political crisis in decades. Mkumbo said international partners, mainly European nations, withheld $2–$3 billion of Tanzania’s $10 billion development budget in response, while the government disputes allegations by CHADEMA and some activists that security forces killed more than 1,000 people during the unrest.
