Tanzania LNG and the East African Gas Decade

Tanzania LNG: the May 2024 Host Government Agreement and the slipping FID #

On 25 May 2024, at State House in Dar es Salaam, the Government of Tanzania signed a Host Government Agreement (HGA) with Equinor and Shell covering the integrated Lindi LNG project. President Samia Suluhu Hassan used the ceremony to mark the end of the negotiating impasse that had run since 2014 and hardened under President Magufuli (2015 to 2021). The HGA establishes the legal, fiscal, and dispute resolution architecture but is not itself a final investment decision. It sits alongside the Production Sharing Agreement and a separate inter government agreement on cost recovery and infrastructure tariffs.

The integrated project assumes about 10 million tonnes per annum of liquefaction capacity at Lindi across two trains, fed from Block 2 (Equinor with ExxonMobil) and Blocks 1 and 4 (Shell, post BG Group). Total upstream resource sits in the 50 to 57 trillion cubic feet recoverable range based on Equinor, Shell, and TPDC filings. The headline capital cost cited in Ministry of Energy briefings and Equinor's 2024 Capital Markets Day was USD 42 billion all in for upstream, pipelines, and the onshore liquefaction plant.

FID was initially targeted for 2025. By April 2026, the live working schedule pushes FID into a 2026 to 2027 window. Slippage has three drivers. First, EPC tendering for the plant, long lead subsea systems, and the marine terminal is sequenced rather than concurrent, which adds 9 to 12 months. Second, the fiscal terms still require ratification by the Bunge and gazetting under the Petroleum Act 2015 and the Natural Wealth and Resources Permanent Sovereignty Act 2017, both tightened under Magufuli. Third, both Equinor and Shell are sequencing capital against competing Atlantic basin and Qatari commitments, and neither will take FID until the macro LNG balance for early 2030s deliveries is clearer.

Block ownership across Mtwara and Lindi: who holds what #

The Mtwara and Lindi offshore acreage is held under Production Sharing Agreements that have been remarkably stable in operatorship since the 2010 to 2012 discovery wave, even through the Magufuli renegotiations. Equinor (formerly Statoil) operates Block 2 with ExxonMobil as 35 percent partner. Shell holds operatorship of Blocks 1 and 4 after the 2016 BG Group acquisition, with Ophir successors and Pavilion historically associated. Pavilion Energy's Tanzania position in Block 6 has consolidated through Maurel et Prom (M&P) and partners. TPDC, the national oil company, holds a back in right typically in the 10 to 20 percent range across the producing blocks.

The block table below tracks operator, partners, and resource estimates as of early 2026, drawn from operator filings, TPDC disclosures, and Wood Mackenzie's East Africa upstream assessments. Block 1, Block 2, and Block 4 in aggregate hold sufficient recoverable gas to support two LNG trains for at least 25 years at design utilization, with upside if Block 4's southern compartments convert through appraisal.

Mozambique restart: Coral South online, Coral North FID, Area 1 force majeure lifted #

Mozambique is the comparison that frames the Tanzania timeline. Eni's Coral South FLNG, the first floating LNG vessel deployed in Africa, achieved first cargo in November 2022 from the Coral South field in Area 4 and has run reliably since, delivering roughly 3.4 million tonnes per year against a long term offtake to BP. In late 2025, Eni and partners (ExxonMobil, CNPC, Galp, Kogas, and ENH) sanctioned Coral North FLNG, replicating the design with refinements and adding another roughly 3.5 million tonnes per year capacity. The Coral North FID is significant because it confirms that the FLNG model can be repeated under Mozambique's security and fiscal conditions without requiring a fully onshore footprint.

The TotalEnergies operated Mozambique LNG (Area 1) onshore project, with original cost guidance of approximately USD 20 billion and capacity of 13.1 million tonnes per year across two trains, declared force majeure in April 2021 after the Palma attacks by the Cabo Delgado insurgency. The force majeure was formally lifted in March 2025 following sustained improvement in the security environment delivered by Rwandan and SAMIM forces alongside the Mozambican military. TotalEnergies CEO Patrick Pouyanne confirmed the lift at the company's strategy update and signalled that contractor remobilization, EPC re tendering, and lender re engagement would run through 2025 and 2026, with first LNG no earlier than 2029 and more plausibly 2030. The ExxonMobil operated Area 4 Rovuma LNG onshore project, originally targeting roughly 15 million tonnes per year, remains stalled with no firm FID date as ExxonMobil prioritizes Coral North and Atlantic basin opportunities.

The cumulative Mozambique trajectory is a lesson for Tanzania. The original timetable assumed Area 1 first LNG in 2024. Reality will deliver Area 1 first LNG in 2029 to 2030 at best, and Rovuma is open ended. The project table below sets out current state and most credible first cargo dates.

EACOP financing: the western banks dropping out and the alternative capital stack #

The East African Crude Oil Pipeline (EACOP) is the parallel hydrocarbon megaproject in the region and a useful read of how western project finance is repricing African oil and gas exposure. EACOP runs 1,443 kilometres from the Tilenga and Kingfisher upstream fields in Uganda's Lake Albert basin to the port of Tanga on Tanzania's Indian Ocean coast, with TotalEnergies as operator and largest shareholder, CNOOC, the Uganda National Oil Company, and the Tanzania Petroleum Development Corporation as partners. Capital cost guidance has run in the USD 5 billion range, with the upstream developments adding an additional USD 10 billion plus.

More than 25 western banks (Standard Chartered, Barclays, BNP Paribas, Credit Agricole, Deutsche Bank, ING, Societe Generale, JPMorgan, and Nordic and Italian peers) have stated they will not finance EACOP, citing climate, biodiversity, and human rights concerns raised by the StopEACOP coalition. Marsh, Munich Re, and other large insurers have also withdrawn. The financing gap has been closed in part through Chinese policy banks, Sinosure cover, Standard Bank, Stanbic, Afreximbank, the Islamic Development Bank, and TotalEnergies balance sheet capacity. First oil targets have moved from 2025 into 2027.

The Tanzania LNG project is watching this dynamic carefully. Equinor and Shell are larger and better rated than TotalEnergies on the EACOP perimeter, both retain investment grade credit, and an LNG project with long term tolling style offtake to investment grade buyers (typically European and Asian utilities) is structurally easier to bank than a crude pipeline. Even so, the same European bank pool that exited EACOP will impose tighter scope 1, 2, and 3 disclosure conditions, methane intensity guarantees, and community grievance protocols on Tanzania LNG financing. Expect the Tanzania financing package to lean more on Japan Bank for International Cooperation, Nippon Export and Investment Insurance, Korea's KEXIM, and Chinese policy capacity than the original 2010s era project finance template assumed.

Suluhu vs Magufuli: regulatory continuity and the politics of resource nationalism #

President John Magufuli (2015 to 2021) reframed extractive policy through the 2017 Natural Wealth and Resources legislation, which asserted permanent sovereignty, banned international arbitration in resource disputes, mandated local content, and forced renegotiation of mining stability agreements. The chilling effect on Tanzania LNG was material: International Oil Companies paused major capital commitments and Tanzanian counterparts at TPDC and the Ministry of Energy lacked a credible mandate to compromise. President Samia Suluhu Hassan, who succeeded after Magufuli's death in March 2021, has executed a deliberate course correction. She has not repealed the 2017 laws (politically costly inside CCM) but has restored negotiation channels, accepted carve outs in the HGA framework, and rebuilt working relationships with Equinor and Shell.

The May 2024 HGA signing reflected this. The agreement preserves Tanzanian sovereignty and the role of TPDC, but it accepts negotiated dispute resolution, ring fenced cost recovery, and economic terms benchmarked to peer LNG jurisdictions. Suluhu's October 2025 election, in which she won the CCM ticket and the general election convincingly though under contested opposition conditions, removed the immediate political risk of regime change before FID. The signal to investors is that the regulatory direction is stable through at least the 2030 horizon. Risks remain around the implementation of local content rules, the practical functioning of Tanzanian administrative tribunals as the dispute resolution forum, and the willingness of future Cabinets to honour the HGA fiscal package if commodity prices spike.

The TAZARA railway upgrade is a useful tell on the broader political economy. The September 2024 framework with China Civil Engineering Construction Corporation and a Chinese policy bank consortium recapitalizes the 1,860 kilometre Tanzania to Zambia railway. It signals that Dar es Salaam is comfortable layering Chinese financing into strategic infrastructure even as it courts Norwegian, British, Dutch, and American oil capital. This pluralistic foreign policy posture is likely the right read for how the Tanzania LNG capital stack will close.

The 2026 to 2030 East African gas supply outlook #

The most defensible base case for East African LNG supply through 2030 has three components. First, Mozambique reaches roughly 7 million tonnes per year of FLNG output by 2029 (Coral South plus Coral North) with Area 1 contributing first cargoes late 2029 or 2030 and ramping toward nameplate over 2030 to 2032. Second, Tanzania reaches FID in the 2026 to 2027 window, with first LNG no earlier than 2031 and more plausibly 2032 given the Bechtel comparable construction times for greenfield LNG of similar scope. Third, Rovuma LNG (Area 4 onshore) does not reach FID before 2028 and contributes nothing to the 2030 horizon.

Under that base case, East African LNG exports rise from roughly 3.4 million tonnes per year in 2025 to roughly 17 to 20 million tonnes per year by 2030. That is meaningful but still represents less than 4 percent of global LNG capacity at the end of the decade against the reference scenarios in the IEA Africa Energy Outlook 2025 and Wood Mackenzie's H2 2025 LNG outlook. The implication is that East Africa will be a credible second tier supplier by 2030, sized between Egypt's restored exports and Nigeria's incumbent NLNG complex, but it will not reshape Atlantic or Pacific basin balances on its own.

The strategic conclusion is straightforward. Mozambique offers nearer term volume but under unresolved Cabo Delgado security risk. Tanzania offers longer dated but more politically stable volume, with functional institutions and a reformist president. Buyers sequencing 2030s LNG procurement should take volume from both jurisdictions rather than treating them as substitutes. Strategos tracks the upstream and host government model continuously, and Argus reads the security and political risk perimeter that defines whether Cabo Delgado remains insurable.

Sources #

• Tanzania LNG and Strategic Outlook 2024
• Shell Tanzania position and Integrated Gas business update
• Tanzania Petroleum Development Corporation reserves and operations
• Mozambique LNG, Area 1 force majeure lift and project relaunch update
• Coral South FLNG operations and Coral North FID announcement
• Africa Energy Outlook 2025
• Global LNG outlook H2 2025: East Africa supply assessment
• Tanzania, Equinor, and Shell sign LNG Host Government Agreement
• EACOP financing tracker: banks, insurers, and ECAs
• Natural Wealth and Resources (Permanent Sovereignty) Act 2017 and Petroleum Act 2015
• TAZARA railway concession and Chinese financing framework
• Mozambique LNG project finance and Cabo Delgado security assessment