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Oil Pipeline Deal: Tanzania president to travel to Uganda Next Week

By Timothy Sibasi,

DAR ES SALAAM—The president of  Tanzania Pombe Magufuli will travel to Uganda next week to lay a foundation stone on for the construction of a $3.55 B-crude export pipeline that would pump Ugandan oil from Kabaale in the Albertine Grabben region to Port Tanga in Tanzania for international markets.

President Magufuli will be hosted by his counter President Museveni of Uganda who in August this year also was hosted at Tanga port in Tanzania by president Magufuli on a similar exercise.

Apparently there’s advance preparations in the Albertine Grabben region of a head of his arrival including heightening and beefing up security in the Albertine due to its sensitive geographical location facing the insecure Eastern Democratic Republic of Congo boundaries with Uganda.

In photo: artistic impression of Uganda, Tanzania oil pipeline running from Kabaale in Uganda to Tanga port in Tanzania.

The 1,445 km oil pipeline-project is set for completion by 2020. The Pipeline will stretch from landlocked Uganda’s western region the Albertine Grabben, where crude reserves were discovered in 2006.

The project will be the first of its kind to be the longest electrically heated crude oil pipeline in the world, according to Guy Maurice, Senior Vice President of Africa at Total Exploration and Production.

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

Tanzanian President John Magufuli, will be flanked by his Ugandan counterpart Yoweri Museveni, who is expected to urge the three joint venture partners to speed up construction of the pipeline.

Map of showing location of Uganda’s oil rich region, the Albertine Grabben located in the East African rift valley.

Unlike the SGR delays on the Ugandan side due to land compensation issues and securing of funds from the Exim Bank of China; this joint venture oil pipeline deal between Uganda and Tanzania is likely not to face similar setbacks as the two countries show commitment to have the project completed in a space of three years.

During president Museveni’s state visitation to Tanga port in Tanzania on a similar mission, president Magufuli told his counterpart that the contractors can do it even night and day to ensure the project is completed as quick as possible.

“Act with big speed and make sure you finish this project before 2020.” Said Magufuli

Uganda estimates overall crude reserves at 6.5 Bbbl, while recoverable reserves are seen at between 1.4 Bbbl and 1.7 Bbbl.

The Kampala based government on several occasions has said it picked Tanzania over its other neighbor Kenya as the route for the proposed 24-in. export pipeline because it was a “least cost and least risky” option.

While in Tanzania last August president Museveni said that “Tanzania offered several concessions to make the pipeline profitable in spite of the falling global crude oil prices.”

In the implementation course of the project, Tanzania agreed to waive taxes, offered to take up shares in the pipeline project and charge a tariff of $12.2/bbl to make the project feasible.

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