Tanzania expects to sign a long-delayed $42 billion liquefied natural gas (LNG) project agreement before June, with gas production projected to begin in about eight years, a senior government official has said.
Kitila Mkumbo, Tanzania’s Minister of State in the President’s Office for Planning and Investment, disclosed this on Monday during a briefing in London. He said negotiations on the project had reached an advanced stage after years of uncertainty.
“We have basically concluded the commercial discussions. We are now only discussing the legal framework of this agreement,” Mkumbo said. “The deal is done and we expect this to be signed before June.”
The LNG project is jointly operated by Equinor and Shell, with partners including Exxon Mobil, Pavilion Energy, Medco Energi, and Tanzania’s national oil company, TPDC. Once developed, the project is expected to unlock about 47.13 trillion cubic feet of natural gas.
The project had been stalled after the Tanzanian government proposed changes to a financial agreement reached in 2023, creating uncertainty among investors. Mkumbo noted that a detailed legal framework was necessary given the scale of the investment, which he described as the largest single project in Tanzania’s history.
Alongside similar developments in neighbouring Mozambique, Tanzania’s LNG project could help establish East Africa as a major LNG export hub, particularly for Asian markets. The government estimates the project will generate more than 100,000 jobs during construction and operation.
Mkumbo also revealed that President Samia Suluhu Hassan has instructed the central bank to sell part of Tanzania’s gold reserves to raise funds for infrastructure projects.
“We need cash. We have a lot of infrastructure projects that are going on and they need funding,” he said.
His comments come amid heightened financial pressure on the government following political unrest linked to last year’s general election, which escalated into Tanzania’s most serious political crisis in decades. President Hassan was declared the landslide winner after her two main challengers were disqualified.
The main opposition party, CHADEMA, and human rights activists have alleged that security forces killed more than 1,000 people during the unrest. The government has disputed the figure but has not released an official death toll.
According to Mkumbo, international partners—mainly European countries—responded by withholding between $2 billion and $3 billion from Tanzania’s $10 billion development budget, including concessional loans and other forms of budget support.
Despite these challenges, the government remains optimistic that finalising the LNG deal will restore investor confidence and provide a major boost to the country’s economy.
