The development will distribute locally produced gas to industrial, residential and transportation customers, including businesses located beyond the country’s existing pipeline network. Commercial operations are targeted for 2027, subject to a final investment decision.

The agreement was announced during the 2026 Infra for Africa Forum in Dar es Salaam.

TAQA Arabia is participating through its subsidiary, Rosetta Energy Solutions, while state-owned TPDC will supply natural gas to the facility.

The gas will be converted into LNG and moved by dedicated vehicles to customers across the country. This transport model can reach inland markets without the cost and long construction periods associated with extending pipelines to every industrial area.

The partners did not announce a final investment amount or ownership structure.

However, African Business reported before the signing that the proposed development was valued at more than $100 million.

Africa50 is expected to provide project development, investment and financial structuring expertise, with the aim of creating a commercial model that could be repeated elsewhere in Tanzania and other African markets.

“This agreement reflects Tanzania’s commitment to using its natural gas resources to support national development,” TPDC Managing Director Mussa M. Makame said.

“As a gas supplier to this project, TPDC will work with the project partners to broaden domestic access to cleaner, reliable energy and create greater value for the Tanzanian economy.”

The project gives Tanzania another route for turning its gas reserves into domestic industrial value.

The country holds approximately 57.54 trillion cubic feet of natural gas, placing it among Africa’s major gas-resource holders. However, much of the existing distribution infrastructure remains concentrated around Dar es Salaam, Pwani, Lindi and Mtwara.

Tanzania’s Energy and Water Utilities Regulatory Authority reported that the mainland had about 186 kilometers of natural gas distribution pipelines and four compressed natural gas receiving terminals as of June 2025.

The network served 61 industrial customers, while the number of CNG vehicles and three-wheelers had increased to 15,954. Gas consumption by vehicles rose by 98% during the 2024/25 financial year.

Those figures point to growing demand from transport and industry, but they also show the limits of the current network.

EWURA has identified mini-LNG as a suitable option for serving longer-distance markets, including Dodoma, Mwanza and Mbeya. It could also support future cross-border gas trade with neighboring countries.

Industrial demand is becoming more important as Tanzania reduces its reliance on gas-fired electricity following increased hydropower generation.

Industry accounted for 24.65% of the country’s natural gas consumption in the 2024/25 financial year, up from 14.19% a year earlier. This shift creates a stronger commercial case for infrastructure that directs available gas to factories, transport operators and other productive users.

“This project will turn Tanzania’s abundant gas resources into reliable energy for industry, communities and transport, strengthening energy security and accelerating industrialization,” said Pakinam Kafafi, CEO of Rosetta Energy Solutions.

The small-scale project is separate from Tanzania’s proposed $42 billion LNG export development in Lindi.

That larger project, involving Equinor, Shell, ExxonMobil, Pavilion Energy, Medco Energi and TPDC, is designed to process offshore gas for international markets.

The Africa50-TPDC-TAQA Arabia development is focused mainly on distributing domestic gas within Tanzania and reducing dependence on imported and higher-emission fuels.

“Africa50 was created to develop bankable projects, mobilize finance for investments in Africa’s infrastructure and accelerate delivery,” Africa50 Group CEO Alain Ebobissé said.

He added that the institution intends to expand infrastructure investment capable of attracting capital from African and international investors.

The project’s wider importance lies in its distribution model. Many gas-producing African countries have substantial reserves but lack the pipelines needed to connect industrial centers and transport markets.

A commercially successful small-scale LNG network in Tanzania could show how modular infrastructure and private capital can bring domestic gas to customers faster, support local manufacturing and create more value from African energy resources.