Tanzania and Uganda Sign Oil Pipeline Agreement

Uganda Tanzania oil pipeline agreement 2021

The President of Tanzania Samia Suluhu Hassan and the President of Uganda Yoweri Kaguta Museveni signed on 11th April 2021 in Entebbe the implementation agreements for the construction of the East African Crude Oil Pipeline (EACOP).

The signing ceremony of the project was also attended by representatives of the companies shareholding the project: Total of France, the China National Offshore Oil Corporation (CNOCC), the Uganda National Oil Company (UNOC), and the Tanzania Petroleum Development Corporation (TPDC).

Following the signature of the investment agreements, Total holds 72% of the project, UNOC 15%, CNOCC 8%, and TPDC 5%.

The project involves the construction of a 1,445 km long oil pipeline that will transport crude oil from Uganda’s Lake Albert oil fields to the Tanzanian port of Tanga on the Indian Ocean. 1,115 km will pass through Tanzania.

The project is expected to cost USD 3.5 Billion and create 10,000 jobs during construction and is planned to have a capacity of 216,000 barrels of crude oil per day. Uganda will pay Tanzania USD 12.20 for every barrel flowing through the pipeline.

Speaking at the event, President Samia said the project will be of great benefit to the country both by increasing national revenues, creating jobs, and promoting social welfare.

For his part, President Museveni outlined the benefits that will be gained for Uganda and Tanzania but also East Africa by ensuring a reliable and affordable fuel supply.

In addition, President Museveni recalled the reasons for passing the pipeline through Tanzania rather than Kenya as initially planned, being more economical. Uganda previously agreed to build an oil pipeline to the Kenyan port of Lamu. However, due to security and cost concerns, a shorter and safer route to the port of Tanga was considered.

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Total explains that main engineering, procurement, and construction contracts will be awarded shortly, and construction will start. The first oil export is planned for early 2025.

President of Tanzania Samia Suluhu Hassan and the President of Uganda Yoweri Kaguta Museveni in Entebbe
The President of Tanzania Samia Suluhu Hassan and the President of Uganda Yoweri Kaguta Museveni in Entebbe

The Lake Albert Crude Oil Project

The Lake Albert project encompasses Tilenga and Kingfisher upstream oil projects in Uganda and the EACOP. The upstream partners are Total (56.67%), CNOOC (28.33%), and UNOC (15%).

The Tilenga project, operated by Total, and the Kingfisher project, operated by CNOOC, are expected to deliver a combined production of 230,000 barrels per day at a plateau.