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Dar es Salaam, Tanzania – Tanzania is moving closer to an agreement on the terms for its long-stalled $42 billion liquefied natural gas (LNG) project at Likong’o in Lindi, with a final deal anticipated before the end of 2025.
The massive project, under negotiation for over a decade, is intended to be one of Africa’s largest energy investments, with a planned annual output of up to 10 million tonnes of LNG. The scheme is based on drawing gas from deep offshore blocks operated by Shell (Blocks 1 & 4) and Equinor (Block 2).
The Equinor-operated Block 2 is pivotal, holding over 20 trillion cubic feet (tcf) of recoverable gas. While a framework agreement was signed in 2022, regulatory details and financing remain key hurdles, repeatedly delaying the Final Investment Decision (FID) since talks began in 2014.
Broader Economic Ambitions
Tanzanian officials are linking the flagship LNG project to a wider industrial and infrastructure strategy under Vision 2050. The energy wealth is expected to support a proposed extension of the Mtwara–Mbambabay–Mchuchuma/Liganga Standard Gauge Railway (SGR), which would facilitate mineral transport and connect to regional markets in Zambia, Malawi, and the Democratic Republic of the Congo (DRC).
With estimated recoverable gas resources of 57 tcf, Tanzania is positioning itself as a potential regional LNG hub, capitalising on the International Energy Agency’s projection of more than 25% growth in global LNG demand by 2030.
Parallel Energy and Mining Drives
In a move to further diversify its energy and resource base, the government has relaunched its fifth oil and gas licensing round, offering 26 blocks for exploration.
Concurrently, Tanzania is finalising a $3 billion joint venture with China’s Shudao Investment Group Company Ltd. (SDIG) to implement the long-awaited Mchuchuma coal and Liganga iron ore projects. This mineral-based initiative includes a 600 MW coal-fired power plant at Mchuchuma and a 1 million tonne-per-year steel plant at Liganga, which are seen as central to developing raw material supply chains for local manufacturing.
The successful finalisation of both the LNG and the Chinese-backed mining projects would be crucial steps in achieving Tanzania’s industrialisation goals and consolidating its role as a regional economic anchor.
