Tanzania signs oil pipeline MoU with Uganda

Posted on : Wednesday , 21st October 2015

KAMPALA, Uganda – Governments of Tanzania, Uganda,  French firm, Total E&P (Uganda) and the Tanzania Petroleum Development Corporation (TPDC) have signed  a Memorandum of Understanding for a crude oil export pipeline framework writes SAM OKWAKOL.

“If we can be able to get a least cost pipeline route to the East African coast, our crude oil will be exported cheaply,’’ Dr Fred Kabagambe-Kaliisa, the Permanent Secretary of Uganda’s Ministry of Energy and Mineral Development, said last week.

According to a Ministry statement, the MoU creates a working framework for the potential development of a crude export pipeline from Hoima to Tanga Port in Tanzania.

The objective is to select a route that will result in the lowest unit transportation cost that constitutes the most viable option for the crude export pipeline.

The MOU also provides for other participants to join in the process of assessing and developing this option.

Ngosi Mwihava, the acting Permanent Secretary in Tanzania’s Ministry of Energy and Minerals said: “This infrastructure will stand the test of time in our regional cooperation. Tanzania is carrying out exploration work along the proposed route where any potential discovery will further enhance the economics of the project.”

He said: “The due diligence is a valid exercise, because you have to justify the route you are going to consider to justify the least cost option.”

Dr Kabagambe-Kaliisa, said the MoU also enables the signatories to continue working together to fine tune studies and field work on the Tanga route.

This is in order to further appraise the merits of a crude export pipeline option through Tanzania with a view to achieving the lowest unit transportation cost for crude oil from Uganda.

Adewale Fayemi, the General Manager Total E & P (Uganda), described the MoU as a key milestone of achieving the least cost option to transport Uganda’s crude oil to the Indian Ocean. “We look forward to fine tune the process.”

He sadi Total E&P is committed to supporting the route and collaborating with all the partners involved. 

James Mataragio, the TPDC Managing Director said: “This a great project, which if executed, it will create opportunities for the people of Tanzania

“This project is going to open new investment opportunities, and create jobs for citizens of both countries. We have that experience required to build and manage pipelines. I want to assure Ugandans that they have got all the support from TPDC and Government of United Republic of Tanzania,” Mataragio said.

The Uganda government has signed MoUs with oil companies licensed in the country for the commercialization of the oil and gas resources.

It was agreed that the crude oil discovered in Uganda is commercialized through crude to power, refining and export of crude oil.

In this regard efforts to establish a least cost pipeline route to the East African coast are being undertaken in partnership with industry and the respective Partner States where the crude export pipeline is likely to pass.

Uganda is currently undertaking a process to identify and assess the comparative merits of three pipeline routing options, two via Kenya to Mombasa and Lamu, and one via Tanzania to Tanga, in respect of the export of crude oil from Uganda to the international market. The objective is to select a route that will result in the lowest unit transportation cost and constitutes the most viable option for the pipeline project.