THE construction of a major crude oil pipeline from Hoima in Uganda to Tanga in Tanzania will begin in April 2021, taking the cooperation of the two east African countries in the oil industry to new heights.

Energy Minister Dr Medard Kalemani announced the fresh development yesterday in the National Assembly when tabling his ministry’s 2.196trn/- budget estimates and expenditures for the financial year 2020/21.

According to the minister, Tanzania has allocated 1bn/- for compensation to people and institutions affected with the implementation of a 3.5billion US dollar worth 1,445km-long underground pipeline.

Ugandan and Tanzanian technocrats have been holding rounds of discussions with project implementers seeking to address contentious issues.

Dr Kalemani said the project is waiting for a final investment decision and the parties are finalising negotiation on four key issues – Host Government Agreements (HGAs), a Shareholders’ agreement (SHA), Land Lease Agreement (LLA) and the Ports Agreement (PA).

“The priorities during the incoming financial year is to complete these agreements and compensation of affected people,” he said.

According to the minister, a number of activities have also been completed, which include preparations of the environmental impact assessment reports as well as awareness- raising to communities near the pipeline.

The East African Crude Oil Pipeline (also known by its acronym EACOP) was scheduled to begin in January 2017 and become completed in 2020.

However, it was pushed ahead following delays by Uganda, Tanzania and partners not agreeing on provisions of the HGA, SHA and transportation tariffs.

Nonetheless, parties slowed to reach a final investment decision after a tax dispute when Tullow that held a 33.3 per cent stake in Lake Albert opted to sell-off its shares.

Lake Albert is the main onshore development in northwest Uganda with an estimated 1.7billion barrels of oil reserves.

But last month, Tullow Oil Plc sold its entire interests in Uganda’s Lake Albert development project, including the EACOP to Total S.A for consideration of 575million US dollars.

Thus the partners remain Total SA, China National Offshore Oil Corporation, Uganda National Pipeline Company and Tanzania Petroleum Development Corporation.

Meanwhile, the government said it has allocated over 500m/- for feasibility studies on the construction of Dar es Salaam-Zambia refined petroleum products pipeline.

The energy minister said the project will be implemented in collaboration with the Zambian counterparts and will have take-off points in Morogoro, Iringa, Njombe, Mbeya and Songwe.

The project, according to the minister, is vital for revenue generation, employment creation and increasing fuel availability in areas the pipeline passes.


Source: Daily News