Uganda, Tanzania Sign $15bn Oil Pipeline Deal in Kampala

The long-awaited 1,440 km crude oil pipeline will be constructed from Uganda’s Albertine region to Tanzanian seaport of Tanga

Uganda’s President Yoweri Museveni has signed the East African Crude Oil Pipeline project in a landmark agreement with his Tanzanian counterpart Samia Hassan Suluhu and French oil company Total.

President Samia Suluhu Hassan in conversation with President Yoweri Museveni

The deal, which is expected to unlock upwards of $15 billion in investments comes fifteen years after Uganda’s discovery of commercially-viable crude oil deposits.

President Yoweri Museveni led the Uganda delegation while Total chairman and chief executive Patrick Pouyanne led the French company’s team.

The crude oil export pipeline is expected to run from Uganda to the Indian Ocean at Tanga and Tanzania. President Samia Suluhu was in Kampala on her first foreign trip as head of state to sign the tripartite agreement on behalf of Tanzania. President Museveni tweeted

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Uganda’s oil deposits are estimated to have reduced in value from $61 billion in 2013 to $18 billion in 2018 due to a fall of crude oil prices on the world market. A deal for the $3.5 billion East African Crude Oil Pipeline (EACOP) is a strategic win for Tanzania which will earn $12.7 off each barrel of oil transported through it.

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At peak production, the 1,445-kilometre heated pipeline which starts in Hoima in the Albertine Graben, western Uganda, and ends at Tanga Port in Tanzania, will transport 216,000 barrels of crude oil per day. Due to the waxy nature of Uganda’s oil, it will be one of the longest heated crude oil export pipelines in the world.

Extraction will take place at two oil fields: The Kingfisher field, which is operated by China National Offshore Oil Corporation Ltd, and the Tilenga field, operated by Total S.A.

Disagreements with the oil companies in the past has seen Uganda pushing back FID several times, leading to delays in the commercialisation of the resource.

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The anticipated investment is the biggest in Uganda’s history and is expected to unlock economic growth and knock-on opportunities in construction, agriculture, hospitality, real estate as well as logistics.

Over 2,000 expatriates are expected in the country to work in the oil and gas sector as Uganda looks to become East Africa’s first crude oil producer.

Sulpha says more than 10,000 job opportunities will be created during execution.

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