Goa, India – A senior minister has announced that Tanzania expects to sign a crucial deal for its long-stalled liquefied natural gas (LNG) plant before June 2026, with production anticipated to commence eight years later.
The statement aligns with remarks made by Deputy Minister of Energy, Salome Makamba, at India Energy Week, where she affirmed that Tanzania is fostering an “enabling environment for investment” to stimulate economic growth.
The ambitious US$42 billion project is a joint venture between the state-owned Tanzania Petroleum Development Corporation (TPDC) and a consortium of international energy giants, including Shell and Equinor as joint operators, with partners like ExxonMobil.
It aims to develop over 47 trillion cubic feet (tcf) of the nation’s total estimated reserves, which exceed 54 tcf.
Ms Makamba highlighted ongoing government efforts to de-risk investments, including new seismic data surveys in the Eyasi–Wembere, Lindi, and Mtwara blocks and investments in domestic natural gas distribution for industrial and residential use.
These initiatives are part of a broader strategy to leverage the country’s significant energy resources, which have attracted major players such as BG Group (now part of Shell), Petrobras, and Ophir Energy over the years.
However, the minister’s optimistic outlook is tested by persistent systemic challenges. Despite its vast potential, Tanzania’s oil and gas sector has been hampered by issues that have delayed critical projects like the LNG plant.
Academic studies and industry reports point to significant hurdles, including policy incoherence, inadequate infrastructure, and weak governance frameworks. A 2025 analysis highlighted that while Tanzania has a strong legal foundation for oversight, its enforcement is often weak, leading to investor uncertainty and operational delays.
Furthermore, the effectiveness of local content policies—designed to ensure Tanzanians benefit from the sector—has been questioned. Research indicates a gap between policy goals and practical implementation, constrained by limited domestic capacity and regulatory challenges.
Experts suggest that unlocking the sector’s full potential requires a fundamental shift from state-centric control to a more transparent, market-driven approach, including restructuring the national oil company and strengthening regulatory autonomy.
As the government pushes to finalise the LNG deal, it also professes a commitment to a “just and inclusive transition to clean and environmentally friendly energy.”
Balancing the drive for fossil fuel exploitation with sustainable development goals remains a critical challenge for the East African nation as it stands on the cusp of a potential energy boom.
