Tanzania Misses Its Own Deadline on a US$42 Billion LNG Deal

Tanzania · ENERGY

Tanzania said in January that it would sign the legal framework for its US$42 billion liquefied natural gas project before June. Two months past that deadline the document remains unsigned, and the country’s largest single investment is still waiting on a signature.

A deadline set in London, and missed

Speaking to reporters in London in January 2026, Kitila Mkumbo, Tanzania’s Minister of State in the President’s Office for Planning and Investment, was unambiguous. “The deal is done and we expect this to be signed before June,” he said, adding that the project was expected to create more than 100,000 jobs. Commercial negotiations, he said, were complete; what remained was legal review by the Attorney General’s office.

June came and went. The Rio Times reported in June that Tanzania expected to sign the agreement that month, on the strength of the minister’s own timetable. As of early August 2026 no signing has been announced by the government, by TPDC or by the companies involved. For a project first agreed in outline more than a decade ago, it is another entry in a long list of missed dates.

For an investor reading from outside Tanzania, the distinction that matters is between a deal being agreed and a deal being signable. The host government agreement is the contract that fixes tax, legal and regulatory terms for the life of the project. Until it exists, Shell, Equinor and their partners cannot take a final investment decision, cannot order equipment and cannot begin construction. Everything else is preparation.

What is still being argued over

The sticking points are the same ones that have slowed the project for years. The government wants a domestic market obligation, reserving a share of the extracted gas for use inside Tanzania rather than sending all of it to export markets. It also wants guaranteed participation for Tanzanian companies in the supply chain. Both are ordinary demands from a resource-holding state, and both cut into project economics.

The counterweight is scale. This is the largest single investment Tanzania has ever attempted, at a value the government now puts at US$42 billion. When President Samia Suluhu Hassan witnessed the signing of the preliminary agreement at State House in Dodoma in June 2022, the figure quoted was US$30 billion. The gap reflects both revised engineering estimates and the passage of time.

At that 2022 ceremony, the president told negotiators to “continue to safeguard the interests of the country in the next stages,” while acknowledging that “it is give-or-take, so both sides should embrace fluidity.” Four years later, the fluidity has not produced a signature.

The resource, and how long it takes to reach a buyer

The project targets more than 47 trillion cubic feet of natural gas in deep water off the southern coast, to be piped ashore and liquefied at a plant at Likong’o, in Lindi region, for export by sea. Shell and Equinor operate the offshore blocks; ExxonMobil, Pavilion Energy, Medco Energi and TPDC hold the remaining interests.

The timeline is the part most often lost in the headline number. When the minister spoke in January he put first production about eight years out, which points to around 2034, and that count already assumes a signature that has not happened. An investor buying into the Tanzanian growth story on the strength of this project is buying a payoff in the next decade, not this one.

Construction itself is expected to run four to six years and to employ around 10,000 people, with roughly 500 permanent jobs once the plant is operating, figures given by the then energy minister, January Makamba, at the 2022 signing.

Smaller projects are moving while the big one waits

While the export megaproject waits, TPDC has pushed ahead with cheaper work on fields that already produce. At Mnazi Bay in Mtwara region, drilling on the first of three wells began on 6 February 2026. Two of the wells, MB-5 and MS-2, are intended to lift output from the existing field; the third, Kasa-1, is an attempt to open a new one.

TPDC Director General Mussa Mohamed Makame, briefing reporters in Dodoma, put the cost of the three-well programme at about 235 billion Tanzanian shillings, roughly US$89 million at current rates. The remaining two wells are expected to be completed by October 2026.

TPDC is separately advancing the Ntorya project in the Ruvuma basin, which includes a 34.2-kilometre pipeline to the Madimba gas processing plant at an estimated cost of about 122.7 billion shillings, or roughly US$46 million. These are modest sums beside the LNG scheme, but they deliver gas within a year or two rather than within a decade, and they are entirely within the state’s own control.

Why outside powers are watching

The consortium itself maps the competition. Shell and Equinor are European; ExxonMobil is American; Pavilion Energy and Medco Energi bring Singaporean and Indonesian capital and a route into Asian demand. Europe wants non-Russian gas, Asia remains the largest LNG import market, and Washington has an interest in an American major holding a stake in one of the continent’s largest energy assets.

China’s presence is in the infrastructure rather than the reserves. The Mtwara to Dar es Salaam gas pipeline, commissioned in 2015, was built with a US$1.2 billion loan from China’s Export-Import Bank. That pipeline carries the gas that Tanzania already uses at home.

The regional context matters too. Mozambique’s LNG build-out has been repeatedly disrupted by conflict in Cabo Delgado, and Uganda is pushing its own oil export route. Tanzania’s pitch is stability. The longer the signature is delayed, the weaker that pitch becomes. The contest is tracked in our pillar Africa: The New Scramble.

What to watch next

The single event that changes the picture is the signing itself. Watch for an announcement from the Ministry of Energy, from TPDC, or in the quarterly disclosures of Shell and Equinor, both of which would have to flag a commitment of this size to their own shareholders.

After that comes the harder test: a final investment decision, which is a separate step and can follow the agreement by years. Environmental approval and the associated legal amendments also remain outstanding.

In the meantime, the honest read is that Tanzania’s near-term gas story is the small onshore programme at Mnazi Bay and Ntorya, not the export terminal. The US$42 billion figure is real, but so is the fact that nobody has yet signed for it.

More: Tanzania news in English, every day from The Rio Times.

Frequently Asked Questions

Sources

• Reuters — Tanzania expects to sign $42 billion mega LNG project before June, minister says
• Petroleum Upstream Regulatory Authority (PURA) — Government signs Preliminary Agreement of the HGA
• Daily News (Tanzania) — TPDC executes strategic projects to boost gas production
• Tanzania Petroleum Development Corporation (TPDC)

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error

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