KAMPALA – Tanzanian President Jon Magufuli who is currently in Uganda for three-day state visit laid foundation stone on Thursday in Rakai district preparation for construction of the proposed East African Crude Oil Pipeline (EACOP).
The 1,445-kilometre pipeline, planned to run from Hoima District in mid-western Uganda to Tanzania’s southern Tanga Port on the Indian Ocean coast is projected to cost at least $3.55b.
President Magufuli , who accompanied by his host Yoweri Museveni said the project should not take long to construct.
“Tanzania is security wise fine, and under my leadership I promise that we will never let you down.”
Uganda and Tanzania are expected are expected to meet 30 to 45 percent of the costs through their respective national oil companies, Tanzania Petroleum Development Corporation and Uganda National Oil Company (Unoc).
Tanzania also agreed to several concessions like waiving corporate tax and value-added tax (VAT) to reduce the cost of the project, depreciation tax holiday for 20 years and free (land) corridor, and acquisition of shares in the project.
The technical designs (Feed) for the pipeline, whose contract was awarded last December to US based Gulf Interstate Engineering with an eight months completion timeline, are said to be complete, according to French oil major Total E&P, the lead joint venture partner spearheading the project.
The Feed is expected to lead to Final Investment Decision (FID) early next year and subsequently the Engineering, Procurement and Construction phase. The actual start date of construction remains murky but officials say will create an estimated 10,000 jobs.