The Tanzanian government, Shell and Equinor have resumed negotiations on a host government deal for a $30 billion liquefied natural gas (LNG) project that had been stalled since 2019.

President Samia Suluhu Hassan - sworn in in March - has committed herself to creating a more favorable business environment, and her newly appointed Energy Minister, January Makamba, is confident about the government's expectations for LNG. The Tanzanian governates hope to reach an agreement with the companies by the end of this year.

Plans by Royal Dutch Shell and the Norwegian company, Equinor, to build an LNG terminal in Lindi have been underway since 2014, but delays and disagreements with the former administration have reduced foreign investors' prospects for the industry.

In January, Equinor wrote off the entire $982 million book value of its Tanzania LNG project (TLNG) on the grounds that the country has a poor economy. The company is the operator of offshore Block 2, which is estimated to reserve more than 20 tons of gas. Equinor holds a 65% stake in the operation, while US company ExxonMobil holds 35%, and Tanzania Petroleum Development Corporation (TPDC) has the right to intervene with a 10% stake. In recent months, Equinor has expressed strong interest in rejoining the draw with the local government.

Royal Dutch Shell also hopes to complete talks with the government and start the project. Shell operates Blocks 1 and 4, which are estimated to reserve 23 trillion cubic feet of gas. Shell holds a 60% stake, while British company Ophir Energy and Singaporean company Pavilion Energy each hold 20%.