- Tanzania's Finance Minister confirmed negotiations on the $42 billion LNG project were nearing completion after missing an earlier June deadline
- The project, led by Equinor and Shell, targets 47.13 trillion cubic feet of offshore gas reserves with exports as the primary goal
- Tanzania is also opening its domestic debt market to foreign investors as aid inflows decline and the government seeks new financing options
Elijah Ntongai is an experienced editor at TUKO.co.ke, with more than four years in financial, business, labour and technology research and reporting. His work provides valuable insights into Kenyan, African, and global trends.
Tanzania is approaching the final stages of negotiations on a KSh 5.4 trillion ($42 billion) liquefied natural gas project that could cement its place as one of East Africa's foremost energy exporters.
Source: Twitter
Finance Minister Khamis Mussa Omar confirmed that talks were close to conclusion, following an earlier expectation that a formal agreement would be signed before June 2026.
The project is led by Equinor and Shell, with ExxonMobil, Pavilion Energy, Medco Energi, and the state-owned Tanzania Petroleum Development Corporation also among the partners.
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What the LNG Project Involves
The development is designed to tap into Tanzania's offshore gas reserves, which amount to 47.13 trillion cubic feet. Most of the extracted gas is earmarked for export markets, while a portion will be channelled into domestic supply.
The project represents the cornerstone of Tanzania's broader ambition to grow into a regional energy powerhouse.
The LNG deal is not the only infrastructure development shaping the region's energy future. Uganda is preparing to begin its first oil exports through Tanzania's port of Tanga in early 2027, a move that would further consolidate East Africa's role in global energy trade.
On the power generation front, Tanzania has set a target to nearly double its electricity capacity to 8,000 megawatts by 2030.
The government also aims to raise the share of energy from sources it classifies as clean to approximately 75%, covering hydropower, solar, wind, and natural gas.
Tanzania Opens Debt Market and Weighs IMF Programme
Beyond the energy sector, Tanzania is pursuing structural reforms to attract international capital.
This year, the government widened foreign access to its domestic bond market, established a sovereign yield curve, and encouraged corporate debt issuance.
Officials have not yet decided whether to issue an international bond, and the central bank is currently assessing the risks tied to greater foreign participation in domestic debt markets.
Domestic revenue now covers roughly two-thirds of Tanzania's 62.3 trillion shilling ($23.7 billion) national budget, as foreign development assistance continues to shrink.
The government was also weighing a new International Monetary Fund lending programme, with a decision anticipated by June. A previous IMF arrangement worth $1.7 billion concluded in July.
For Tanzania, the LNG agreement, if finalised, would open the door to significant foreign investment, employment creation, and new streams of government revenue to fund public development programmes.
Source: TUKO.co.ke