Tanzania LNG Project Poised to Unlock Vast Offshore Gas Reserves

Tanzania's gas sector is on the cusp of significant growth, with the proposed Tanzania LNG project at its center. The project, backed by Shell, Equinor, and ExxonMobil, aims to tap into the country's vast offshore gas resources, estimated to be around 57 trillion cubic feet.

The current production level of 226m cubic feet a day is just a fraction of this potential, supporting about 42% of national power production and some industrial consumers. The proposed LNG project would increase Tanzania's annual GDP by about 7%, according to Equinor modelling.

Despite delays in negotiations over fiscal terms, regulatory arrangements, and commercial agreements, the government is confident that the final investment decision (FID) will be concluded by June 2026. The project's progress comes at a critical time for the global LNG market, which is facing increased competition from new producers.

Tanzania's advantage lies in its location on unrestricted shipping lanes to growing markets in India, China, Japan, and South Korea. However, delivering and burning natural gas releases methane and carbon dioxide, highlighting the need for investment in modern production technology and emissions reduction measures.