Tanzania plans to finalise agreements in the coming months for a liquefied natural gas project estimated at $42 billion, Finance Minister Khamis Mussa Omar told Reuters on Tuesday, 13 October. The development, one of the largest energy projects under consideration in East Africa, is intended to commercialise gas discoveries made offshore the country.

The project is led by Equinor and Shell, with ExxonMobil, Pavilion Energy, Medco Energi and state-owned Tanzania Petroleum Development Corporation. It covers resources that regional authorities estimate at 47,130 billion cubic feet of gas initially in place in Tanzanian offshore areas. Equinor and Shell did not respond to Reuters' requests for comment.

The timetable remains uncertain, however. Authorities had previously hoped to sign the agreement before June, but the minister only said the file was almost finalised. The East African Community says negotiations on the host government agreement and commercial arrangements are ongoing. Signing these documents must still be followed by a final investment decision by the partners before the project can effectively launch.

The onshore facility is planned in the Lindi region. It is to receive gas from offshore blocks 1, 2 and 4, liquefy it and direct it mainly to export. Part of the output would be reserved for the domestic market, according to the minister, which could increase the supply available for power generation and industrial activity.

Data published by the operators give a sense of the targeted deposit. Equinor says block 2 contains more than 20,000 billion cubic feet of gas and that it holds 65% of that licence, alongside ExxonMobil with 35%. Shell, for its part, estimates that blocks 1 and 4 hold about 16,000 billion cubic feet. These volumes are resource estimates and do not prejudge either the commercially recoverable quantities or the future rate of production.

At its announced level, the project would represent a major investment inflow for Tanzania. The East African Community's official presentation highlights the expected public revenue, employment and mobilisation of foreign capital, but these benefits will depend on the conclusion of the agreements, financing, technical studies and the investment decision.

The government also wants to raise the country's electricity generation capacity to about 8,000 megawatts by 2030, almost double the current level, according to Khamis Mussa Omar. It also aims for a 75% share for sources it classifies as clean, a category that includes hydropower, solar, wind and natural gas.