Tanzania says $42 billion LNG deal delayed on local content use

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Tanzania says $42 billion LNG deal delayed on local content use

7:52 CAT | 02 May 2025

FILE - Tanzania’s Deputy Prime Minister and Minister for Energy Doto Biteko said the government wants to agree the terms of a long-delayed $42 billion liquefied natural gas facility with international oil companies by October. [File photo: Tanzania Daily News]

Tanzania’s Deputy Prime Minister Doto Biteko said the government wants to agree the terms of a long-delayed $42 billion liquefied natural gas facility with international oil companies by October.

Negotiators for a consortium comprising Shell Plc, Equinor ASA and Exxon Mobil Corp. and the government were haggling over “a few outstanding issues” such as the authority’s demand that at least 3% of the gas from the LNG project be reserved for domestic utilization, Biteko told lawmakers late on Tuesday.

The government also wants the consortium to commit to using local content and insurance companies registered in Tanzania for the project, he said.

“If we conclude three outstanding issues, this agreement will be signed in 2025,” said Biteko, who is also Tanzania’s energy minister. “President Samia Suluhu Hassan would like to see this project concluded before” presidential elections in October, he added.

There have been major gas discoveries in Tanzania and Mozambique over the last two decades but development has been delayed for years. The projects have the potential to set the region up as a potential export hub for LNG, the fuel has newfound global importance given US President Donald Trump’s support for hydrocarbon production.

Plans to connect gas discoveries offshore Tanzania to feed an LNG export terminal on the East African nation’s coast have been in the works for more than a decade. The development appeared to gain momentum in 2023 when Hassan expressed her support and negotiations were concluded over the host-government agreement — which outlines commercial legal and fiscal terms — and an amended production-sharing deal with the project consortium but have since slowed.

Tanzania is keen to avoid repeating past mistakes of entering deals in the extractive sector that weren’t beneficial for the country, said Biteko, adding that lawmakers should give the government time to negotiate a good agreement.

Source: Bloomberg