Tanzania And Uganda Reach Agreement To Develop Hoima-Tanga Oil Pipeline

Negotiations to develop the oil pipeline from Hoima in Uganda’s western region to Tanga’s port in Tanzania’s coastal northern region have recently been concluded, with the Presidents from both countries agreeing to export 6.5 billion barrels of Ugandan oil reserves through the Indian Ocean.

According to Bloomberg, Tanzania’s President John Magufuli and Uganda’s President Yoweri Museveni recently agreed on the pipeline linking their countries covering a total distance of 1,200 kilometres at a total investment of USD 4 billion that will create 15,00 jobs.

Both countries have agreed to move quickly in order to accelerate the pipeline’s construction and in another meeting with Uganda’s government officials to be held during the second week of March, 2016, more details about the project will be unveiled, explained Tanzania Petroleum Development Corporation (TPDC) Managing Director, Mr. James Mataragio.

On the other hand, Uganda’s government through a statement issued by the Presdency’s Press Secretary, Mrs. Linda Nabusayi, also confirmed that the construction of the pipeline from the Albertin Graben oil region in south western Uganda to Tanga’s port had reached an agreement after President Musevini met with his peer from Tanzania in Arusha during the 17^th Ordinary East African Community Summit.

The announcements from both government regarding the pipeline’s construction were made during the 17^th Ordinary East African Community Summit recently held in Arusha, and follows a Memorandum of Understanding (MoU) signed in October, 2015, between Uganda’s Ministry of Energy and Mineral Development, Total Uganda, Tanzania’s government, and the TPDC for carrying out a feasibility study to establish a pipeline to export Ugandan oil via the East African Coast after the route through Kenya raised security concerns due to attacks from Islamist militants from Somalia.

It also follows an announcement done by Total Uganda in January, 2016, which said that despite falling oil prices it maintains its plans to export Ugandan petrol to international markets through Tanga’s port that was confirmed by its partners in Uganda, the British Tullow Oil Plc and the Chinese CNOOC.

According to Total, the route through Tanga offers the best option due to its lowest unit cost since the other route through Lamu in Kenya’s coastal region, represents a higher investment due to the roads and water infrastructures that need to be constructed to pave the land for the pipeline.

Uganda discovered crude oil for first time in 2006 at the Albertine Rift Basin in the country’s border region with Democratic Republic of Congo (DRC) with reserves estimated at 3.5 billion barrels that were raised in 2014 to 6.5 billion barrels.