Tanzania closes in on LNG deal as special project law remains last major hurdle

Lindi. Tanzania has made substantial progress in negotiations over its long-delayed liquefied natural gas (LNG) project.

The remaining task is a dedicated legal framework to govern the plant for the next half-century, a senior energy official said on Monday.

Permanent Secretary in the ministry of Energy responsible for oil and natural gas, Dr James Mataragio, said the government was working to ensure the project starts "as soon as possible" while protecting the interests of Tanzanians.

He was speaking in Lindi at the opening of the Likong'o pre-primary and primary school.

The school was built by the Tanzania Petroleum Development Corporation (TPDC) and the project's investors under a corporate social responsibility (CSR) programme.

Dr Mataragio said the government was approaching the talks "with great care".

Its aim, he said, was for the project to deliver benefits to residents of Lindi and to the country as a whole without compromising national interests.

He said significant headway had been made on key issues, including commercial and tax matters.

The negotiation of a project-specific law is among the outstanding items.

Further talks on it are due to take place shortly in Arusha, with the aim of putting in place a legal framework that safeguards the interests of the state, citizens and investors alike.

The law is expected to be passed by Parliament and to govern the project over its planned duration of 50 years.

Dr Mataragio stressed that the terms must reflect the broader interests of Lindi's residents and all Tanzanians, while giving investors a secure and predictable environment.

Why the law matters

A dedicated statute is intended to provide long-term legal and fiscal certainty for an investment of this scale.

It would normally sit alongside the host government agreement (HGA), which sets out the rights and obligations of the state and the investors, and the production sharing agreements covering the offshore gas blocks.

The government has previously said the project will need all of these instruments, including a project law and a benefit-sharing agreement, before it can proceed.

Investors will want to see the law in its final form before committing capital.

A 50-year horizon means that stability clauses, taxation, local-content obligations and dispute resolution will all be scrutinised closely, both by lenders and by Tanzanian legislators.

The proposed onshore LNG export plant at Likong'o, near Lindi, has been under discussion for more than a decade.

The project has at times sat in limbo because the host government agreement was not signed, with investment decisions on hold pending the outcome of negotiations.

Shell, which drilled 18 wells, has reported discoveries of about 16 trillion cubic feet of gas.

Tanzania's recoverable gas reserves have been put at more than 57 trillion cubic feet.

The International Energy Companies involved are led by Equinor and Shell, with ExxonMobil, Pavilion Energy and Medco also taking part, alongside TPDC. Equinor has said that a final investment decision remains to be taken.

Cost estimates have risen over time.

In January 2026 the government said commercial negotiations were closed and that it was finalising legal issues, with a signing targeted for June.

The press has reported that, once the agreements are signed, the next stage is engineering work, with first cargoes expected around 2030.

Industry analysts have noted that the project still has to overcome longstanding uncertainty over commercial terms and global market dynamics.