Tanzania’s $42 Billion LNG Deal Could Redraw the Energy Map — And Quietly Bypass Hormuz
Tanzania is nearing final negotiations with Equinor, ExxonMobil and Shell on a $42 billion LNG project. If signed, it could become one of Africa’s largest energy infrastructure bets.
Tanzania is moving toward what could become one of the largest energy deals in African history: a $42 billion liquefied natural gas project involving Equinor, ExxonMobil and Shell. Senior executives are expected in Dar es Salaam for final-stage negotiations, with the government pushing to convert years of stalled discussions into legally binding agreements.
If completed, the project would place Tanzania on the global LNG map at exactly the moment buyers are searching for gas supply outside the Gulf. That timing matters. The Iran war and repeated threats to the Strait of Hormuz have reminded markets that global energy security is still dangerously concentrated. Qatar remains one of the world’s central LNG suppliers. Gulf shipping lanes remain vulnerable to missile risk, naval blockades, insurance spikes and diplomatic shocks.
Tanzania’s offshore gas reserves have been known for more than a decade, but development has moved slowly. The usual obstacles are familiar: tax terms, production-sharing arrangements, domestic politics, local-content rules, infrastructure costs and investor caution. A $42 billion LNG project is not a normal commercial venture. It is a generational bet on gas demand, political stability, export contracts and long-term regulatory trust.
Reports indicate that the hardest commercial issues may now be close to settlement. If tax terms and commercial frameworks are agreed, the remaining step is turning political momentum into enforceable contracts. That is where many megaprojects succeed or die.
The upside is enormous. LNG infrastructure could create jobs, expand Tanzania’s industrial base, increase export earnings and anchor the country as an East African energy hub. It could also create new leverage with Asian and European buyers looking to diversify away from Middle Eastern chokepoints.
The global context is unusually favorable. Europe still wants non-Russian gas. Asia wants reliability. Industrial states want optionality. Traders want routes that do not depend on Hormuz. Tanzania offers a location that faces the Indian Ocean, connects naturally to Asian markets and sits outside the Gulf’s immediate military pressure zone.
But the risks are equally serious. LNG is capital-intensive and slow. Even if final investment decisions move forward, production may still be years away. The world’s energy balance could change before the first cargo ships. Renewables, battery storage, nuclear power and demand shifts could alter the economics of long-term gas.
Megaprojects can also create dependency. Governments often spend future revenues before they arrive. Local communities may face displacement, ecological pressure and unequal benefit distribution. If transparency is weak, LNG wealth can become another resource curse.
For Equinor, ExxonMobil and Shell, Tanzania offers scale and diversification. For Tanzania, the companies offer capital, technology and market credibility. For buyers, the project offers a future supply source outside the most dangerous chokepoints. Each actor wants something different, which is why the contracts matter so much.
The Hormuz crisis has changed how energy projects are judged. Ten years ago, investors might have looked mainly at price, reserves and fiscal terms. Today they also ask: can the route survive war? Can cargoes move if the Gulf closes? Can insurers price the risk? Can governments protect infrastructure?
By that measure, Tanzania’s geography has become more valuable. If Tanzania signs, it will not only be exporting gas. It will be exporting optionality. In a world where one blocked strait can shake every market, optionality is power.