Tanzania’s Minister of Energy Medard Kalemani said in a recent 2020/21 budget speech that the works for the East African Crude Oil Pipeline Project from Uganda to Tanzania will start in April 2021 after the Final Investment Decision (FID) is made.
He reminded that during 2019-20, the environmental impact assessment was completed and by 2020/21 the work will focus on a host government agreement, a joint venture and compensation.
Based on this schedule, oil production may start in 2024, a year later than the most recent forecast.
Lake Albert Crude Oil Development Project
The Lake Albert Crude Oil Development Project in Uganda has over 1.5 billion barrels of discovered recoverable resources and is expected to produce over 230,000 barrels of oil per day at peak production.
The Government of Uganda has agreed on an export route through an oil pipeline –the Uganda–Tanzania Crude Oil Pipeline (UTCOP)–from Lake Albert to the port of Tanga in Tanzania.
However, the UTCOP project has stalled since September 2019, when multinational oil & gas exploration company Tullow Oil, which owned a 33.33% stake in the Lake Albert project, announced the termination of the farm-down agreement with its partners Total and the China National Offshore Oil Corporation (CNOOC).
In April 2020, Tullow Oil Plc sold all of its interests in the project, including the UTCOP, to Total. As of April 2020, the ownership of the pipeline project is split between Total (45%), CNOOC (35%), the Uganda National Pipeline Company (UNOC, 15%), and the Tanzania Petroleum Development Corporation (TPDC, 5%).
Meanwhile, the African Development Bank (AfDB) issued a statement on 20th April 2020, strongly rebutting claims that it plans to provide financial support to the pipeline project.