By Business Insider reporter
Global liquefied natural gas (LNG) markets are heading into a period of structural oversupply. Bloomberg’s Global LNG Market Outlook 2030 forecasts global LNG supply rising to 594 million tonnes by 2030 – a 42 percent increase from 2024 levels – driven largely by new mega-projects in the United States and Qatar. By the end of the decade, international markets could face an oversupply of at least 15 million tonnes.
For gas-rich countries, this looming surplus changes the calculus. LNG will remain important, but relying on exports alone will expose producers to price volatility, weaker bargaining power and tighter financing conditions. For Tanzania – which holds an estimated 57 trillion cubic feet (tcf) of proven natural gas reserves – the message is clear: the country must move faster to convert gas wealth into domestic economic value, or risk missing a narrowing window of opportunity.
Tanzania’s LNG dilemma
Tanzania has long planned a large onshore LNG export project in Lindi, with an estimated cost exceeding US$40 billion. While negotiations with international oil companies have progressed, final investment decisions have repeatedly been delayed, partly due to market uncertainty, financing conditions and global energy transition pressures.
The emerging global LNG glut raises a strategic question: even if Tanzania brings LNG exports online late this decade, will prices and demand be strong enough to deliver maximum returns?
Energy analysts increasingly argue that Tanzania’s comparative advantage lies not only in exporting LNG, but in building a strong domestic and regional gas value chain – one that insulates the economy from global market swings while supporting industrialisation, power generation and job creation.
Turning gas into growth at home
Across Africa, the main constraint preventing gas from driving broad-based development is infrastructure. Limited pipelines, weak transmission networks, inadequate storage and underdeveloped processing facilities mean that gas often bypasses domestic markets and is shipped overseas as LNG.
Tanzania faces a similar challenge. While gas from Mnazi Bay and Songo Songo already feeds power plants in Dar es Salaam and supplies industries such as cement and fertiliser, large parts of the country remain energy-poor. Expanding domestic pipelines, city gas networks and gas-fired power capacity should therefore be a top priority.
With African gas demand projected to rise by 60 percent – from 55 billion cubic metres (bcm) in 2020 to 90 bcm by 2050 – Tanzania has a ready regional and domestic market. Gas-to-power projects could underpin industrial parks, mining operations and agro-processing zones, while reducing reliance on expensive imported fuels.
Learning from continental peers
Other African producers are moving decisively. Senegal is developing integrated gas networks linking offshore production to power plants and industrial hubs. Ghana plans five multi-purpose petrochemical plants producing fertilisers and industrial chemicals, while Mozambique and Zambia have announced a cross-border gas pipeline to support regional industry.
These examples highlight a critical lesson for Tanzania: gas infrastructure must be planned as an ecosystem, not a single export terminal. LNG exports can anchor investment, but pipelines, power plants, fertiliser factories, methanol plants and compressed natural gas (CNG) systems for transport are what multiply economic impact.
Financing the domestic gas push
One reason export LNG projects dominate is financing. International lenders and buyers prefer long-term offtake contracts, which make LNG easier to bank than domestic infrastructure. To shift this balance, Tanzania will need policy innovation.
Credit guarantees, blended finance, development bank participation and regional power purchase agreements can help de-risk domestic gas projects. Targeted incentives for gas-based industries – fertiliser, steel, ceramics, glass and chemicals – would also attract private capital while deepening local value addition.
Importantly, aligning gas development with Tanzania’s long-term vision under Dira 2050 can provide strategic clarity to investors, positioning gas as a transition fuel that supports industrialisation, energy security and climate goals.
Regional integration as a growth lever
As global LNG markets become more competitive, regional gas trade will matter more. Tanzania is well placed to supply gas-fired power to neighbouring countries through the Eastern Africa Power Pool, and potentially export processed gas products rather than raw molecules.
Regional infrastructure – pipelines, power interconnectors and shared industrial zones – can turn Tanzania into a gas hub for East and Southern Africa, capturing value even as global LNG prices soften.
Acting before the window narrows
Industry leaders warn that export-focused strategies alone will not secure Africa’s energy future. With LNG supply surging globally from 2027, late entrants risk weaker returns unless they anchor gas development in domestic demand.
For Tanzania, the opportunity is still real – but time-sensitive. Accelerating gas-to-power projects, expanding pipelines, supporting gas-based industries and unlocking innovative financing will determine whether the country merely exports gas, or uses it to transform its economy. As the global LNG tide rises, Tanzania must decide whether to ride the wave – or watch it pass.
