Aug 29, 2016: The government of Tanzania has commissioned work to transform Tanga - the port along the north coast, into a leading oil trading hub for East Africa.

Tanga region could be an ideal trading hub, considering its strategic geographical positioning with a deep sea port, the ample land area for the construction of big storage tanks and railway connection, believes Charles Mwijage, the industry, trade and investments minister.

Speaking at the inaugural ceremony of the second kiln at Tanga Cement Company at Pongwe, Mwijage, said, “we can create a conducive environment for the ship to ship (STS) transfer. The region has 25 metres draft deep.”

“There is enough area for construction of tanks for white products of up to 100,000 tonnes...Tanga has no congestion of the tanks and it has railway network,” he added.

The minister also said that construction of an oil trading hub in Tanga would help to cut on freight charges for oil transportation from the source market as large crude oil carriers could anchor and filter oil products into other tankers in the ship to ship (STS) transfer or to transfer storage tanks.

The proposed facility would lower prices for oil products and hence attract market in the East and Central African region in Democratic Republic of Congo, Burundi and Rwanda as well as other neighbouring countries, he said.

The minister further added that the construction of an oil trading hub would enable the establishment of government bonded stock or floating stocks as strategic reserves which may influence price movement in favour of the country.

The government is also planning to complete the construction of a crude oil pipeline from Uganda to Tanga in 2020, at an estimated cost of $3.5 billion.

Tanga was chosen by Uganda for the export of its crude oil, rather than Lamu in Kenya, as the route is likely to be the most cost-effective when Uganda begins exporting oil by 2020.

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