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$100 million project to slash LPG prices by 40 percent
Deputy Prime Minister and Energy minister Energy Doto Biteko shakes hands with Petredec Africa managing director Michael Demond during the laying of the foundation stone for the ASAS-Petredec LPG terminal in Tanga on June 5, 2025. PHOTO | CORRESPONDENT
What you need to know:
- A new LPG terminal to be built in Tanga is expected to make clean cooking energy more accessible for Tanzanian households and expand supply to neighbouring countries
Tanga. Tanzania’s energy sector is set for a major transformation following the announcement of a $100 million (Sh270 billion) investment to construct the Tanga International Energy Terminal for Liquefied Petroleum Gas.
The terminal, a partnership between local firm Asas Limited and UK-based Petredec, will be built in Chongoleani, Mkinga District.
Once operational, it is expected to reduce LPG prices by up to 40 percent, making clean energy more accessible for Tanzanian households and expanding supply to neighbouring and landlocked countries, including Zambia.
Launched on Thursday with a foundation stone-laying ceremony officiated by Deputy Prime Minister Doto Biteko, the terminal is projected to be completed by December 2027.
Strategically located on a 26-hectare site in Tanga Bay, it will feature six mounded storage spheres with a capacity of 40,000 cubic metres in its first phase, eight truck loading gantries, and a 2.8-kilometre underwater pipeline.
“This project supports our vision of ensuring 80 percent of Tanzanians have access to clean energy by 2034,” Dr Biteko said and restated the government’s commitment to creating an enabling investment environment.
He added that LPG use had grown from 300,000 tonnes in 2022/23 to 400,000 tonnes in 2023/24, driven by the national clean energy campaign, and urged the investors to prioritise local contractors during construction to spur job creation and economic growth.
“If small jobs that Tanzanians can do are given to foreigners, our economy cannot grow. This project is like the Chalinze–Dodoma power line; we must protect it.”
Dr Biteko also called on the LPG industry to ensure rural accessibility.
“Let us introduce small-scale, flexible payment technologies like ‘Pay as You Go’ systems. Not everyone can afford a full cylinder at once.”
Asas Group representative Ahmed Salim Abri said the terminal would reduce bulk procurement costs and thus make gas more affordable. “We will also own the gas carrier ship to minimise operating expenses,” he noted, adding that the terminal, which surpasses Petredec’s similar South African project in scale, will help lower East Africa’s reliance on imports from Russia and other distant markets.
Tanga Regional Commissioner Batilda Buriani hailed the terminal as a catalyst for local development. “This project will put Tanga on the global map.
It is expected to create over 1,000 direct and indirect jobs, further boosting regional income,” she said.
Petredec Managing Director for Africa Michael Demond said large-scale infrastructure is key to affordable and reliable LPG supply.
“We are proud to support this transformative project. The Tanga terminal will help establish Tanzania as a clean energy hub for East Africa.”
Association of Tanzania Oil and Gas Service Providers chairman Abdulsamad Abdulrahim said local firms are ready to contribute.
“This is a chance to showcase Tanzanian capability across logistics, safety, marketing, and technical services. We are not on the sidelines,” he said.
