Mining, Oil & Gas

The 1,445km Hoima-Tanga pipeline construction commissioned

Uganda’s President Yoweri Museveni and his Tanzania counterpart Joseph Pombe Magufuli have commissioned the construction of the 1,445km-long East African crude oil pipe line from Hoima district in Uganda to the Tanzanian port of Tanga.

The heated crude oil pipeline, according to Uganda government sources-the longest of its kind in the world, will cost $3.5 billion and will be completed by 2020. Total E&P, CNOOC and Tullow Oil will undertake the pipeline works together with the two governments of Uganda and Tanzania. The pipe is expected to carry 216,000 barrels of crude oil per day.

A statement from Uganda’s presidency said, Museveni thanked President Joseph Pombe Magufuli, the Tanzanian government and the Tanzanian people for the numerous concessions they gave to the Ugandan government and partners that enabled the fast tracking of the project.

Museveni said because of the concessions the cost of delivering a barrel of oil from Hoima to Tanga will be $12.2 per barrel. He said all East African member states should  look at the East African crude oil pipe line as an East African community asset, noting that with many discoveries of oil and gas deposits in many other countries in the region, the facility will be a vehicle for oil to the sea from all the East African countries.

“There already confirmed hydro-carbon deposits in Eastern Democratic Republic of Congo and Turkana and there are possibilities in Rwanda, Tanzania and Burundi and once these are confirmed the pipeline will be more useful for the region,” Mr. Museveni said.

President Museveni, however, said whereas natural resources are important for generation of wealth, the greatest resource to the region are her people who consume and produce goods and service.

“These natural resources are important but more important for us are the people. The 170 million East Africans because they consume and produce,” he said. “They are producers of goods and services and will do well once we harmonise. They help us negotiate credibly with bigger markets and are resourceful in the forward thrust of these economies.”

Museveni saluted the private partners in the oil pipeline project (Total, CNOOC and Tullow) and assured them that with the right working relationship, they will together end in a win-win situation.

On his part, Tanzania’s Magufuli thanked President Museveni and his government for trusting Tanzania and choosing the Tanga route for the project despite the other options available.

He said it was a vote of confidence to the Tanzanian people.

“This pipeline could have gone to a shorter route of 900kms but Museveni has supported us. We had to make concessions for our Ugandan brothers like we have previously done to liberate them,” he said.

“We had to sacrifice but we shall also benefit. During construction, direct jobs will be between 10,000 to 15,000 while temporary ones will peak to 30,000. Already hotels are benefiting as guests come here and we shall set up a cement factory here, one of the biggest in East Africa,” said Magufuli.

He said with the oil coming to Tanga, Tanzania would now buy crude oil from Uganda instead of incurring high exports of importing from the Arab world, while indicating that Uganda would also find it cost-effective selling to Tanzania.

Magufuli also said that Tanzania also sought to gain from the skills and expertise of Ugandan technocrats who had built experience in the extractives sector.

“Oil was discovered by Ugandan experts. They have done it. They will come to Tanzania to check our hydrocarbons in Tanganyika—where there are traces of oil. If we find it, they will bring their skills to Tanzania,” he said.

The Tanzanian President warned speculators who are rushing to set up houses in the pipeline path, saying the government already has satellite images, including already existing property. He warned that only those with bonafide claims would be compensated while speculators will walk away empty-handed.

He challenged the contractors to ensure they complete the project on time, saying anything short of that would be a big blemish on their profiles and countries of origin.

The 1,445kms, it will be the longest electrically heated oil pipeline in the world.     Uganda will host 296kms of the pipeline, while the remaining 1,149kms will be in Tanzania. On the Ugandan side, the pipeline will run through 8 districts and 24 sub-counties. In Tanzania, it will go through 8 regions and 24 districts. The pipeline will be a buried type, 1.2 metres beneath the ground.

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