Uganda Choose Tanzania for Crude Oil Pipeline To Indian Ocean

According to a joint communique issued at the 13th Summit on the Northern Corridor Integration Projects held in Kampala, Uganda, on 23rd April, 2016, and signed by the Presidents of Uganda, Kenya, Rwanda and Sudan, “the Summit agreed that two crude oil pipelines, one from Lokichar to Lamu [both in Kenya] and another from Hoima [in Uganda] to Tanga [in Tanzania], will be developed by Kenya and Uganda respectively.”

The communique refers to the Uganda–Tanzania Crude Oil Pipeline (UTCOP), a 1,400-km proposed pipeline to transport crude oil from Uganda’s oil fields to the Tanzanian port of Tanga on the Indian Ocean.

Uganda previously agreed to build a joint Uganda–Kenya Crude Oil Pipeline to the Kenyan port of Lamu. However, due to security and cost concerns, a shorter and safer route to the port of Tanga was considered.

French oil & gas multinational, Total, who has 33.33% interest in four blocks in the Lake Albert region in Uganda where oil has already been found, announced in March 2016 that the company will begin construction of the Uganda-Tanzania pipeline to transport oil from Lake Albert to Tanga port as soon as possible.

The Vice President of Total East Africa, Mr. Javier Rielo, indicated that the company expects to invest nearly USD 4bn for the project.

According to the Citizen newspaper, Tanzania will charge Uganda a tariff/transit fee of TZS40,321 per barrel of oil.

Between 2.5bn to 3.5bn barrels or recoverable oil have been discovered in Lake Albert and on the shores of the lake in Hoima District, Uganda. Overall, proven oil reserves are estimated in excess of 6.5bn barrels.