Uganda’s Ministry of Energy and Mineral Development has signed a Memorandum of Understanding (MoU) with Total Uganda, the Tanzania’s Government, and the Tanzania Petroleum Development Corporation (TPDC) for carrying out a feasibility study to establish a pipeline to export Ugandan oil via the East African Coast.
The MoU on crude oil pipeline development principles is meant to create the framework under which the route from Hoima in Uganda’s western region to Tanga’s port in Tanzania’s coastal northern region, would be feasible for the establishment of a crude export pipeline.
Uganda’s Permanent Secretary of Energy and Mineral Development, Dr. Fred Kabagambe-Kaliisa, explained that the MoU not only guidelines the development of the framework, but also enable the parties concerned to constantly enhance it in order to achieve the lowest unit transportation cost for Uganda’s oil.
Uganda is yet to decide among different routes either by Kenya, Kenya-Tanzania or Tanzania, the country’s crude oil at the least cost to the East African Coast, to add more value to the exports, Dr. Kabagambe-Kaliisa added.
TPDC Managing Director James Mataragio, explained that Tanzania’s experience on the development and management of pipelines ensures the Ugandan Government with the expertise needed to develop such project.
The evaluation of the Hoima-Tanga crude oil pipeline is a result of the security concerns raised by the originally selected route through Lamu in Kenya’s coastal region.
Recent attacks by Islamist militants from Somalia to Kenya, jeopardized the construction of the USD 4.5 billion crude oil pipeline at a total length of 1,500 km.
According to Bloomberg, the new route through Tanzania does not count yet with a total length but Uganda has also agreed to develop the reverse-flow pipeline which represents an option to Tanzania for transporting its imported refined petroleum that currently totals USD 2.94 billion and represents 25.47% of the country’s total exports.
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