Tanzania aims to complete oil pipeline from Uganda in 2020

Tanzania aims to complete oil pipeline from Uganda in 2020

Aug 04, 2016: Uganda said in April it would build a pipeline to ship out crude from its fields in the Albertine rift basin, through Tanzania rather than Kenya, which had wanted to secure the export route.

Picking a route is vital for oil firms to make final investment decisions on developing reserves found in Uganda and Kenya, which are among a string of hydrocarbon finds on Africa’s eastern seaboard. Tanzania has found natural gas offshore.

“The pipeline will have a length of 1,443 kilometres… and is expected to be completed in 2020,” Tanzania’s ministry of energy and minerals said in a statement.

Tanzania said three oil firms operating in Uganda— London-listed Tullow Oil, France’s Total and China’s CNOOC – have all agreed to participate in the construction of the pipeline, with building work scheduled to start in June 2017.

Land-locked Uganda found crude oil reserves estimated by government geologists at 3.5 billion barrels in Hoima near the border with the Democratic Republic of the Congo (DRC) in 2006 but production has repeatedly been pushed back.

The jointly developed pipeline will carry Ugandan crude oil to Tanzania’s Indian Ocean port of Tanga for export.

France’s Total, one of the oil firms developing Uganda’s fields, had raised security concerns about the Kenyan route. A Kenyan pipeline could at points run near Somalia, from where militants have launched attacks on Kenya.

Britain’s Tullow Oil, with stakes in both countries, had backed the Kenyan route, saying it would be cheaper if oil from both pipelines followed the same route.

“While we have always believed that a joint Uganda-Kenya export pipeline was the most cost-effective option, we are clear that both Uganda and Kenya’s oil resources can be developed separately,” Tullow said in a statement.

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