Tanzania is on the verge of a historic breakthrough in its energy sector as the government prepares to sign the Host Government Agreement for its massive $42 billion liquefied natural gas project before June 2026. Deputy Minister for Energy Salome Makamba announced the critical deadline during recent briefings, marking what could be the most significant development in the project’s 16-year history since deepwater discoveries were first made in 2010.
The project, which sits on proven reserves of 57 trillion cubic feet of natural gas, is designed to produce 10 million tons per annum from a terminal facility at Likong’o in Lindi. Shell and Equinor, serving as joint operators of the Tanzania LNG development, have been positioning themselves to capitalize on growing Asian market demand for natural gas. First production is now anticipated by 2034, following the completion of Front End Engineering Design work expected to take two to three years after the agreement is signed.
The signing of the Host Government Agreement will trigger the next critical development phase, though a Final Investment Decision is not expected until 2028-2029. This timeline positions Tanzania to join the ranks of East African LNG exporters alongside neighboring Mozambique, where TotalEnergies formally restarted its $20 billion LNG project in late January 2026. The Tanzania project represents decades of production potential and could fundamentally transform the country’s economic landscape.
Minister of State Planning and Investment Kitila Mkumbo, speaking at a London event, confirmed that commercial negotiations between the government and export partners have been completed. Outstanding work is now limited to legal review by the Attorney General’s office. The years of delay were largely attributed to negotiations ensuring the project delivers tangible benefits to Tanzanian citizens and businesses, including local content requirements as specified in the country’s 2017 Petroleum Regulations.
President Samia Suluhu Hassan’s administration has earmarked the LNG development as a national priority, reflecting broader government commitment to advance the project. Natural gas already powers more than 60 percent of Tanzania’s grid-connected electricity generation, with installed capacity reaching 4,031 megawatts by April 2025. The country aims to achieve 100 percent electricity access in all villages by June 2028 and 80 percent access to clean cooking solutions for its growing population.
Source: energycapitalpower.com