Uganda, Tanzania begin $3.5bn oil pipeline

The drive to capitalise on landlocked Uganda’s new-found oil reserves entered a new phase on Saturday (5 August) when the presidents of Uganda and Tanzania ceremonially kicked off construction of a $3.55bn pipeline to carry the crude to port in Tanzania.

The 1,445-km-long pipe, set for completion by 2020, will stretch from Uganda’s western region where crude reserves were discovered in 2006 to Tanzania’s Indian Ocean seaport of Tanga.

It will be the longest electrically heated crude oil pipeline in the world, said Guy Maurice, Senior Vice President of Africa at Total Exploration and Production, Reuters reported.

Total is one of the owners of Ugandan oilfields, alongside China’s CNOOC and Tullow Oil of the UK.

Tanzanian President John Magufuli and his Ugandan counterpart Yoweri Museveni urged the three joint venture partners to build the pipeline quickly, even before 2020.

"We don’t need to delay the completion of the project for almost three years. They can do it even night and day to ensure the project is completed as quickly as possible," Magufuli said, Reuters reported.

"Act with big speed and make sure you finish this project before 2020."

From 2006 a series of oil discoveries put Uganda on the global energy map, and by 2014 its government was estimating that there were between 1.8 billion and 2.2 billion barrels of recoverable crude under Ugandan soil.

The pipeline is critical for turning those reserves into hard currency, even more so after a long-running project to build a refinery in Uganda was hit by the departure of a Chinese contractor at the end of last month.

The government of Uganda said it picked Tanzania over its other neighbour Kenya as the route for the 24-inch pipe because Tanzania offered concessions, Reuters reports. Tanzania agreed to waive taxes and offered to take up shares in the pipeline project. In return it will charge a tariff of $12.2 per barrel.

Image: For illustration, an oil pipeline under construction (Sergei Ryjkov/Dreamstime)

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