Uganda, Tanzania, oil firms sign accords to construct 3.5 billion pipeline

Uganda, Tanzania, and the oil companies Total and CNOOC signed agreements on Sunday to begin construction of a $3.5 billion crude pipeline to transport crude from western Uganda’s fields to foreign markets. 

Since Britain’s Tullow Oil left Uganda last year, France’s Total and China’s CNOOC now own the country’s oilfields. 

According to Robert Kasande, Uganda’s permanent secretary for energy, the signatories have now decided “to start investment in the construction of infrastructure that will produce and transport the crude oil,” 

On her first official visit, Tanzanian President Samia Suluhu Hassan joined Ugandan President Yoweri Museveni in signing the three agreements, which included a host country arrangement for the pipeline, a tariff and shipping agreement, and a shareholding agreement.

In 2006, Uganda found oil deposits in the Albertine rift basin, which is located in the west of the country near the DRC boundary. Total reserves are estimated to be 6 billion barrels by government geologists. 

However, to export the oil to foreign markets, the landlocked east African nation needs a pipeline. 

With a length of 1,445 kilometers (898 miles), the East African Crude Oil Pipeline (EACOP) will link the oilfields to Tanga, Tanzania’s Indian Ocean seaport. 

According to Reuters, since Ugandan crude is extremely viscous, it must be heated to keep it liquid enough to flow. 

EACOP, according to Total, may be the world’s longest electrically heated crude oil pipeline. 

“It’s a very large project, one of the largest we should develop on this continent,” Total’s CEO, Patrick Pouyanné revealed, adding they expected oil production to commence in early 2025.

Pouyanné estimated that more than $10 billion in investments will be needed to get Ugandan crude flowing. 

According to Reuters, environmentalists have objected to the pipeline, claiming that it would endanger ecologically fragile areas along its course, such as nature parks and water catchment areas for Lake Victoria. 

Approximately 263 non-governmental organizations (NGOs) from around the world have asked the CEOs of 25 banks to refuse to lend loans to finance the pipeline. 

Local populations, water sources, and wildlife in Uganda, Tanzania, the Democratic Republic of Congo, and Kenya, they say, will be severely harmed by the project. 

“This pipeline project can be a core of bigger deployments,” Museveni said, adding that investors ight use the EACOP land corridor to build a new pipeline to transport gas from Tanzania and Mozambique to Uganda, Rwanda, Congo, and other countries in the region.

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