Tanzania is poised to sign a transformative liquefied natural gas (LNG) agreement valued at approximately $42 billion by the first half of 2026. The project, led jointly by international energy firms Equinor and Shell, seeks to unlock an estimated 47.13 trillion cubic feet of offshore gas reserves, positioning Tanzania alongside neighbouring Mozambique as a potential anchor in East Africa’s future as an LNG export corridor to Asia.
According to Kitila Mkumbo, Minister of State in the President’s Office for Planning and Investment, the majority of commercial negotiations have been concluded. Speaking during an investment briefing in London, Mkumbo stated that discussions have now shifted towards the legal framework necessary to support a project of this magnitude. With production anticipated to begin within eight years of the agreement’s signing, the project is expected to be the single largest investment in Tanzania’s post-independence history.
In addition to Equinor and Shell, project stakeholders include ExxonMobil, Pavilion Energy, Medco Energi, and the state-owned Tanzania Petroleum Development Corporation (TPDC). The participation of multinational and national players reflects not only the commercial potential of the reserves but also Tanzania’s broader ambition to leverage its natural resources to foster long-term economic transformation.
Mkumbo noted that over 100,000 jobs could be created over the lifespan of the project, a potential boost for local economies and a key pillar of the government’s development vision. However, he also highlighted the need for legal certainty, especially given the project’s scale and the complexity of multi-party involvement. The original financial terms were agreed in 2023 but had been delayed due to proposed amendments by the Tanzanian government aimed at better aligning the agreement with national interests.
As the country embarks on several large-scale infrastructure initiatives, President Samia Suluhu Hassan has reportedly instructed the central bank to release a portion of the country’s gold reserves to generate liquidity. Gold prices have recently reached record highs, with rates exceeding $5,100 per ounce, attributed in part to global political instability and investor preference for safe-haven assets. The central bank’s divestment strategy is intended to shore up domestic financing amidst shifting bilateral funding landscapes.
Tanzania’s fiscal outlook remains under strain following international scrutiny of its 2025 general election, during which opposition figures were disqualified and political tensions escalated. Civil society organisations, including members of the CHADEMA opposition party, have alleged that security responses to election-related unrest resulted in significant loss of life. While some sources have cited fatalities surpassing 1,000, the government contests this figure and has yet to release an official count.
As a consequence of these events, several European development partners have temporarily suspended financial support, withholding an estimated $2 to $3 billion from Tanzania’s $10 billion development budget. This includes concessional loans and grants that typically fund health, education, and infrastructure sectors. Mkumbo acknowledged the funding gap, noting that internal revenue measures are being explored to mitigate external dependency.
The impending LNG agreement presents an opportunity not only for national economic revitalisation but for the East African region to emerge as a strategic energy actor within the global marketplace. This development unfolds within a broader discourse around African states redefining their engagement with international capital, prioritising sovereign equity in resource extraction, and negotiating fairer terms for long-term benefit.
While some critics may view the project through a lens of fossil fuel dependency, others argue that equitable energy partnerships remain a critical lever for African development, particularly in a context where many nations are still navigating the legacy of underinvestment, infrastructure bottlenecks, and uneven global trade relations.
Tanzania’s natural gas strategy, if implemented with transparency and inclusive planning, could not only serve domestic energy needs but also reinforce a continental trajectory towards self-determined economic and industrial policy. The moment invites reflection on the multiple paths towards development, each shaped by political will, international alliances, and the evolving role of African states within the global economy.
