HomeBiggest projectsEast African Crude Oil Pipeline (EACOP) Project Updates

East African Crude Oil Pipeline (EACOP) Project Updates

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The East African Crude Oil Pipeline (EACOP) Project is facing its greatest opposition o date after the European Parliament passed a resolution calling for the project to be halted. This followings concerns over its negative environmental impact and concerns over human rights abuses.

The US$10 billion project is being carried out by a joint venture between China National Offshore Oil Corporation and TotalEnergies. The Pipeline is to extend from Lake Albert in Uganda to the Port of Dar-es Salaam in Tanzania.

East African Crude Oil Pipeline (EACOP) project overview 

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EACOP is a 1,443km crude export pipeline system that will transport Uganda’s crude oil from Kabaale – Hoima District in Uganda to a maritime port facility on the Chongoleani peninsula Tanga in Tanzania. This export system, (296km in Uganda and 1,147km in Tanzania), comprises a 24-inch insulated buried pipeline, six (6) pumping Stations (2 in Uganda and 4 in Tanzania), and a maritime export terminal.

The section in Uganda will traverse 10 districts; Hoima, Kikuube, Kakumiro, Kyankwanzi, Mubende, Gomba, Sembabule, Lwengo, Rakai, and Kyotera; 27 Sub-counties, 3 Town Councils, and 171 villages.

The project’s permanent land requirements cover the crude oil pipeline corridor, Above Ground Installations (AGIs) such as pump stations, access roads, and four construction camps and pipe yards. In Uganda, these land requirements total approximately 2,740 acres or approximately 1,109 hectares (ha). Most of this (over 90%) relates to the 30m wide construction corridor for the export pipeline and AGUs, with the remainder for temporary construction facilities and access roads.

Reported earlier

Nov 2014

Consultant for the US$4bn East Africa oil pipeline revealed

oil pipeline copy

Kenya, Uganda, and Rwanda have concluded the search for a consultant for the regional oil pipeline. The project will be developed as a single project, split into sections that will be carried out by each state in their region according to Kenya’s Energy PS Joseph Njoroge.

The three states settled on Toyota Tsusho Engineering Corporation where a deal was signed on Thursday in Kampala, Uganda. The company was selected among eight that had prequalified for the tender. It is expected that feasibility studies and design of the pipeline will be carried out by the company within five months, from the period of issuance of the contract.

Toyota will also be required to supervise the construction of a fiber optic cable running from Hoima in Uganda, through Lokichar in Kenya to Lamu, and tank terminals in Hoima, Lokichar, and Lamu. Tullow Oil and Africa Oil have in the recent past discovered 600 million barrels of commercially viable oil in the South Lokichar basin in Kenya and thus the need for the multi-billion dollar project. In Uganda, the government estimates its crude reserves at 6.5 billion barrels.

Kenya, Uganda, and Rwanda embarked on the construction of the USD 4bn Hoima-Lokichar-Lamu crude oil pipeline project.

The idea of a single contractor for the project was approved by the East African Community member states of Uganda, Rwanda, South Sudan, Tanzania, and Burundi in May this year. The International Finance Corporation has already committed to providing US$600m for the pipeline project. 

Dec 2018

Uganda-Tanzania Oil Pipeline inches closer to becoming a reality

Gas pipeline Equatorial Guinea

Construction work on the Uganda-Tanzania oil pipeline seems closer to becoming a reality now that Tanzania has announced that they have completed geophysical and geological studies.

This was announced by Dr. Kalemani Energy Minister for Tanzania who sought to allay rumors that the project may not see the light of day. The minister was speaking to the press in the company of his Ugandan counterpart Eng. Irene Muloni in Dar-es-salaam.

1400km pipeline

When completed the pipeline will stretch from Hoima in Uganda to the Tanzanian port of Tanga on the East African coast a distance of over 1400 kilometers and will cost an estimated US$ 4 billion. It is expected that 70 percent of the funding for the project will be raised by Uganda and Tanzania while the rest will come from Tullow and CNOOC.

Also Read:Uganda, Tanzania sign deal for construction of US$ 4bn crude export pipeline

The Homa to Tanga crude oil pipeline will deliver crude oil from Uganda to the East African port town of Tanga. Uganda boasts of having the fourth-largest reserves of crude oil so far discovered on the continent of Africa behind Nigeria, Angola, and South Sudan. The proven reserves currently stand at 6.5 billion barrels a day.

Heated oil pipeline

Owing to the viscous nature of Uganda’s crude oil the 24-inch diameter pipeline will have to be heated to make the crude oil flow easier which will make it the longest electrically heated pipeline in the world.

The decision for Uganda to opt for the Tanga route came after intense lobbying by Kenya to build the pipeline through its country to the port town of Lamu via Lokichar where Kenya has also discovered oil. Since then Kenya has made the decision to go alone on this project.

Jan 2019

Impact Assessment report for Uganda-Tanzania pipeline complete

Phase1 of Nigeria- Morocco gas pipeline project nears completion

The Environmental Social Impact Assessment (ESIA) report for the US $4bn pipeline running from Uganda to Tanzania has been completed and handed over to the National Environmental Management Authority (NEMA).

NEMA confirmed receiving the report and said they will commence the reviewing process to ensure the project doesn’t significantly affect the environment. The report evaluates potential environmental and social risks involved with the projects while giving mitigation measures.

“We can confirm receipt of the ESIA Report for the East African Crude Oil Pipeline (EACOP) Project and our oil and Gas Team will review it in the next set of days,” said NEMA.

Also Read: South Africa to construct an oil refinery and petrochemical complex

Uganda-Tanzania pipeline

East Africa Crude Oil Pipeline (EACOP) contracted the Gulf Interstate Engineers to conduct the study of the pipeline set to run from Kabale-Hoima in Uganda to the Chongoleani peninsula near Tanga Port in Tanzania.

Approval of the 1,445-kilometre pipeline project by NEMA will pave way for its construction which is expected to take at least three years. The project is a joint venture between partners and developers such as Total, China National Offshore Oil Company (CNOOC), and Tullow.

Longest electrically heated oil pipeline in the world

Upon completion, the pipeline is expected to 216,000 barrels of crude oil per day. Due to the viscous and waxy nature of Uganda’s crude oil, the pipeline will need to be heated along the entire route making the East African Oil Pipeline the longest electrically heated oil pipeline in the world.

According to earlier negotiations, Uganda will pay Tanzania US $12.20 per barrel of oil. The joint venture partners are keener on the crude oil pipeline because exported crude oil gives them more value. Uganda has 1.4 billion barrels of recoverable oil, now expected to come in 2022.

The inter-governmental project is bound to create 10,000 jobs for the host communities during construction and benefit the host countries through revenues and taxes. Funding for the project will be made through a project finance agreement where banks and financial institutions are expected to finance 70% of the cost while the Ugandan and Tanzania government alongside stakeholders would finance the remainder.

April 2020

Tullow Oil sell stake in East African crude Oil Pipeline system

The East African Crude Oil Pipeline (EACOP) project is set to receive a new owner after Tullow oil plc. agreed to sell its assets in this project as well as its stake (Block 2) at the Lake Albert Oil Project to Total E&P Uganda B.V. (Total Uganda) under a Sale and Purchase Agreement (SPA) signed between the two bodies.

The East African Crude Oil Pipeline project is a planned 1,443 km pipeline that will be constructed with the aim of transporting about 10.9 million tons of crude oil per year from Lake Albert oil reserves in Uganda to the port of Tanga in Tanzania for export to international markets.

Terms of the SPA

The agreement supports the transfer of ownership of Tullow’s Oil and pipeline assets in Uganda to Total Uganda for a cash consideration of US$575M plus potential contingent payments after the first oil.

Also Read: Uganda and Tanzania to sign US $3.5bn pipeline deal

The Cash Consideration consists of US$500M payable at the completion of the deal in the 2nd half of this year and US$75M payable after the Final Investment Decision (FID) of the Lake Albert Development Project.  The additional payments will be received by Tullow in the form of contingent payments which will be payable on upstream revenues from the Lake Albert Development Project, depending on the average annual Brent price once production commences.

The two multinational oil and gas industry players have had supportive discussions with the Government of Uganda and the Uganda Revenue Authority (URA), including the principles of the tax treatment of the Transaction.  The principles include the position on Ugandan tax on capital gains, which is to be remitted by Total Uganda on behalf of Tullow Uganda, and which is expected to be US$14.6M in respect of the Cash Consideration. All parties involved now intend to sign a binding tax agreement that reflects these principles which will enable the Transaction to complete.

Tullow’s financial strategy to move to a more conservative capital structure

The Transaction, according to Dorothy Thompson, Executive Chair for Tullow oil plc., will strengthen the company’s balance sheet as part of its financial strategy to move to a more conservative capital structure. The Transaction will help in the recovery of the initial capital and the removal of all future capital expenditures associated with the Lake Albert Development Project whilst retaining exposure via contingent consideration linked to production and the oil price through the contingent cash payments described above.

AfDB refutes alleged commitments to fund the East African Crude Oil Pipeline project

The African Development Bank (AfDB) has released a statement that denies its alleged commitment to finance the planned East African Crude Oil Pipeline (EACOP). This comes after more than 100 civil society organizations (CSOs) and environmental NGOs wrote a joint letter asking the institution to withdraw from the project due to its potential social and environmental damage.

In the statement, the pan-African financial institution says that the NEPAD Infrastructure Project Preparation Facility (NEPAD-IPPF) has not provided financing to any private sector company for upstream oil or gas pipeline projects in East Africa and that no commitment has been made to any party to fund the East African Crude Oil Pipeline Project.

Also Read: Uganda to develop US $5bn oilfields

The institution has however emphasized its commitment to keep on crafting policies and delivering investments that promote sustainable development practices on the African continent, including climate adaptation and resilience.

The East African Crude Oil Pipeline

The East African Crude Oil Pipeline (EACOP) project involves the governments of Uganda and Tanzania as the developer and Stanbic of Uganda and Sumitomo Mitsui of Japan as the financial advisers.

The project has however faced serious condemnation, especially in Uganda. At the beginning of this year, the Africa Institute for Energy Governance (Afiego) and the Civil Society Coalition on Oil and Gas (CSCO) called upon Uganda’s National Environmental Management Authority (Nema) and the Ugandan citizens to reject the pipeline’s environmental and social impact report, published by the government of the East African country.

The risk of an oil spill into Lake Victoria according to the above-mentioned organizations would have disastrous consequences for millions of people living in about eight countries and who depend on the two lakes and their watersheds for drinking water and food production through agriculture and fishing.

September 2020

Uganda-Tanzania sign agreement for East Africa Crude Oil Pipeline project

The governments of Uganda and Tanzania have signed the Host Government Agreement (HGA) for the implementation of the East Africa Crude Oil Pipeline (EACOP) project. The pipeline will run from Uganda’s oilfields around Lake Albert to the port of Tanga in Tanzania’s northeast region. According to Hassan Abassi, Tanzania’s government spokesman, more than three-quarters of the pipeline will run through Tanzania.

Abassi also said that Tanzania will earn an estimated US$3.24bn and create more than 18,000 jobs over the next 25 years, or more, that the project will be in operation.

Also Read: Tullow Oil sell stake in East African crude Oil Pipeline system

A deal between Uganda and Total on the East Africa Crude Oil Pipeline

The signing of the agreement between the two East African countries comes a day after Uganda and French oil and gas multinational company Total struck a deal that established a Host Government Agreement governing the export pipeline project in the country and the conditions of entry of the Uganda National Oil Company in the project.

In a statement, Pierre Jessua, the managing director of Total E&P Uganda said that owing to the deal, they have reached a major milestone that paves the way to the Final Investment Decision in the coming months.  “We now look forward to concluding a similar HGA with the Government of Tanzania and to completing the tendering process for all major engineering, procurement, and construction contracts,” he said.

Total is the major shareholder in Uganda’s oil fields after agreeing to buy Tullow Oil’s stake in onshore fields. It will work alongside Chinese state-owned CNOOC to develop the Oil reserves that are estimated to have 6bn barrels.

Recent concerns about the project

Recently a report published by the International Federation for Human Rights (FIDH) and the NGO Oxfam pointed out that if carried out successfully, this project will affect more than 12,000 families and will cause the destruction of sensitive ecosystems in a region whose biodiversity is one of the richest in the world.

Regarding the concerns, Total said that it is determined to “continue useful dialogue” with NGOs and communities and to take on board some of their recommendations.

March 2021

Construction of East African Crude Oil Pipeline to begin in March

The construction of the US $3.5bn East African Crude Oil Pipeline (EACOP) is expected to begin in March. According to Foreign Affairs minister Palamagamba Kabudi, Total Oil Company director for Africa Division Nicolas Terraz assured him that the actual construction of the project would start in the second week of March.

“While in France I held talks with Total director who assured me that all is set for the construction of the pipeline to kick off in the second week of next month,” said Prof Kabudi.

In September last year, the President of Uganda, Yoweri Museveni, and his Tanzanian counterpart, John Magufuli, agreed to hasten the implementation of the EACOP project in a bilateral meeting held in Chato District in Geita. This was a follow-up meeting after Uganda signed the Host Government Agreement (HGA) with Total on the multibillion-dollar EACOP Project.

The two leaders urged officials from both countries to expedite the harmonization of pending issues and fast-track the remaining agreements including the Tanzanian HGA to fasten the implementation of the project.

Also Read: Tazama Pipelines seeks loan to upgrade Tanzania–Zambia Crude Oil Pipeline

East African Crude Oil Pipeline (EACOP)

The pipeline will run from Uganda’s oilfields around Lake Albert to the port of Tanga in Tanzania’s northeast region. According to Hassan Abassi, Tanzania’s government spokesman, more than three-quarters of the pipeline will run through Tanzania. Moreover, Tanzania will earn an estimated US$3.24bn and create more than 18,000 jobs over the next 25 years, or more, after the project is in operation.

Total is the major shareholder in Uganda’s oil fields after agreeing to buy Tullow Oil’s stake in onshore fields. It will work alongside Chinese state-owned CNOOC to develop the oil reserves that are estimated to have 6bn barrels.

April 2021

The launch of the East African Crude Oil Pipeline (EACOP) project was deferred to April

The launch of the East African Crude Oil Pipeline (EACOP) project, which was planned to take place on 22nd March 2021, has been deferred to April 2021 due to the very sad and untimely demise of Dr. John Pombe Magufuli, the former President of the United Republic of Tanzania.

President Magufuli’s astute leadership set a strong foundation for the EACOP project, with key milestones that included the signing of the Inter-Governmental Agreement (IGA) in 2017, and the initialing of the Tanzania Host Government Agreement (HGA) in 2020.

Also Read: Total suspends restart of works at Mozambique LNG project amid attacks

East African Crude Oil Pipeline (EACOP)

The construction of the US $3.5bn East African Crude Oil Pipeline (EACOP) project was expected to begin in March after Total Oil Company director for Africa Division Nicolas Terraz assured Uganda’s Foreign Affairs minister Palamagamba Kabudi that all is set for the construction of the pipeline to kick off.

In September last year, the President of Uganda, Yoweri Museveni, and his Tanzanian counterpart, John Magufuli, agreed to hasten the implementation of the EACOP project in a bilateral meeting held in Chato District in Geita. This was a follow-up meeting after Uganda signed the Host Government Agreement (HGA) with Total on the multibillion-dollar EACOP Project.

The two leaders urged officials from both countries to expedite the harmonization of pending issues and fast-track the remaining agreements including the Tanzanian HGA to fasten the implementation of the project.

The pipeline will run from Uganda’s oilfields around Lake Albert to the port of Tanga in Tanzania’s northeast region. More than three-quarters of the pipeline will run through Tanzania. Moreover, Tanzania will earn an estimated US$3.24bn and create more than 18,000 jobs over the next 25 years, or more, after the project is in operation.

Uganda approves Resettlement Action Plan for EACOP

The government of Uganda through the Ministry of Energy and Mineral Development has approved the Resettlement Action Plan for the East African Crude Oil Pipeline (EACOP) project.

This approval is specific to the Uganda section of the project and paves way for the implementation of the second phase of the land acquisition and resettlement process which involves completing the acquisition of land and securing the rights to the land, including payment of compensation and resettlement of affected households.

According to Mr Honey Malinga, the Director of Petroleum at the Ministry of Energy and Mineral Development, the land acquisition process has been undertaken in compliance with Ugandan law and International Finance Corporation (IFC) principles. “Extensive work has gone into the preparation of the Resettlement Action Plan (RAP) to ensure an efficient implementation and that all affected persons are fairly compensated,” he said.

Also Read: Feruka-Harare pipeline in Zimbabwe to undergo next-gen engineering works

Uganda and Tanzania sign deal for US $3.5bn EACOP project

East African countries, Uganda and Tanzania have finally signed the deal for the US $3.5bn East African Crude Oil Pipeline (EACOP) project. Tanzania President Samia Suluhu Hassan traveled to Kampala to finalize the deal with his Ugandan counterpart, Yoweri Museveni. Total chairman and chief executive Patrick Pouyanne were also in attendance. The deal is expected to unlock upwards of US $15bn in investments.

The long-awaited agreement allows Uganda to move ahead with a project that has been plagued by delays for more than a decade since the confirmation of commercial deposits. The signing of the deal for the EACOP project was earlier scheduled for March 22 in Kampala but was postponed following the death of Tanzania’s President John Pombe Magufuli.

Also Read: 18km gas pipeline system in Ogun State, Nigeria, commissioned by SGDZ

East Africa Crude Oil Export Pipeline (EACOP)

In 2006, commercial quantities of oil were confirmed to exist in the Lake Albert basin in Uganda. The Oil companies in Uganda; CNOOC LTD, TOTAL, and TULLOW PLC completed the exploration phase. In November 2020 Total finalized the acquisition of Tullow’s entire interests in the Uganda Lake Albert development project including the East African Crude Oil Pipeline 2020. Total, now a majority shareholder, and CNOOC are now headed into the development phase, which will consequently lead to the production of Uganda’s oil resources.

Once produced, the crude oil will be partly refined in Uganda to supply the local market and partly exported to the international market. The export to the international market will be through an export crude oil pipeline; The East Africa Crude Oil Export Pipeline (EACOP). This pipeline will be constructed and operated through a Pipeline Company with shareholding from the Uganda National Oil Company, the Tanzania Petroleum Development Corporation, and the two oil companies; TOTAL and CNOOC.

At peak production, the 1,445km heated pipeline which starts in Hoima in the Albertine Graben, western Uganda, and ends at Tanga Port in Tanzania, will transport 216,000 barrels of crude oil per day. Due to the waxy nature of Uganda’s oil, it will be one of the longest heated crude oil export pipelines in the world.

Uganda and Tanzania sign an MOU on military and security cooperation for the EACOP project

Uganda and Tanzania have signed an MOU on military and security cooperation for the East African Crude Oil Pipeline (EACOP) project. The agreement was signed on Friday after a three-day Inter-governmental Security Committee Meeting at the Skyz Hotel Naguru in Kampala. The technical working committee, Chief of Defence Forces, and Security Ministers from the two East African countries were all present.

Also Read: Nyamwamba II Hydropower Project in Kasese, Uganda, Reaches PPA COD

The Committee meeting was called after the two nations signed an MoU on the formation of Inter-Governmental Security for the EACOP project in 2020. It resulted from a resolution made during the 4th Joint Permanent Commission – JPC meeting in Kampala on the 17th and 19th of January 2022.

The necessity of the agreement 

The JPC resolved to establish the Intergovernmental Security to enhance collaboration among the State Parties in fulfilling their security duties in support of the oil pipeline project. The Minister of Defense and Veteran Affairs, Vincent Bamulangaki Ssempijja, stated that the bilateral meeting would aid in the gathering and sharing of intelligence information to combat cross-border insecurity such as terrorism, drug trafficking, cyber security, illegal migration, and sabotage of crude oil pipeline infrastructure, among other things.

Dr Tax Stergomena, Tanzania’s Minister of Defence and National Service, pointed to the importance of diplomatic and military cooperation between the two nations in developing the crude oil pipeline, a key project with numerous socioeconomic advantages. Dr Stergomena expressed worry that terrorism is a serious danger that necessitates collaborative and proportionate actions and measures, adding that Tanzania is committed to collaborating with Uganda to tackle peace and security concerns.

The technical teams for the EACOP project Intergovernmental Security Committees were directed by Ugandan Gen (Rtd) Innocent Oula and Tanzanian Gen Elias Athanas, respectively. The Chief of Defence Forces, Gen Wilson Mbasu Mbadi, and the Chief of the Tanzania People’s Defence Forces were also present. The Uganda-Tanzania Inter-Governmental Agreement was signed in May 2017, and the EACOP Foundation Stones were placed in Tanga in August 2017 and Hoima in November 2017.

Jul 2022

Request for License to Begin Construction of EACOP Submitted to Uganda

A request for a license to begin the construction of the East African Crude Oil Pipeline (EACOP) has been submitted to the government of Uganda by the company in charge of the project. According to Martin Tiffen, general manager of EACOP company they are ready to begin construction. The submitted application will be completed in 180 days, or before the end of the year, according to Honey Malinga, acting director of petroleum at the Ministry of Energy and Mineral Development (MEMD).

Also Read: Latest Developments on Nyamwamba II Hydropower Project in Kasese, Uganda

From Kabaale in the Hoima district of Uganda to Chongoleani in the Tanga region of Tanzania, EACOP will cover a distance of 1,443 kilometers. Tanzania will host 1,147 kilometers of the pipeline’s total length. In Uganda, the remaining 296 kilometers will pass through 10 districts. Malinga continued by urging the EACOP firm to address the concerns of the authorities, citizens, community leaders, and stakeholders.

Scope of the East African Crude Oil Pipeline

Tanzania and Uganda signed the Inter-Governmental Agreement (IGA) for the connection in May 2017. The Petroleum Authority of Uganda (PAU)authorized the front-end engineering and design findings (FEED) in October 2020. The National Environment Management Authority (NEMA) approved the environmental certificate in December 2020. In February 2022, the parties came to a final investment decision (FID) covering the upstream and midstream parts of the Lake Albert project. With a 62% share, TotalEnergies is the main driver behind the connection. Tanzania Petroleum Development Corp. (TPDC) and Uganda National Oil Co. (UNOC) both have 15% of the market, compared to CNOOC Uganda’s 8%.

According to the statement, the pipeline will provide new routes in the area. It claimed that the link would allow access to the East African coast for the eastern Congo cities of Kinshasa, Burundi, Rwanda, and South Sudan. The connection will cost $3.5 billion and transport 216,000 barrels of crude oil daily. The project’s partners anticipate funding the project with 60% equity and 40% loan. An NGO opposed to the EACOP project, BankTrack, has hypothesized that Total may lower the amount of loan requested. Along with others, the NGO has tried to persuade banks and financiers to steer clear of the East African initiative.

In May of this year, Bolloré Logistics received the primary logistics contract with EACOP. More than 80,000 joints of 18-meter line pipe are among the thousands of cubic meters of material that will be transported under the contract terms. The business will bring the pipe into Tanzania and transport it to a facility in the Nzega area. The facility will offer a coating for thermal insulation there. Bolloré predicted that the project’s truck mileage would go over 30 million.

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1 COMMENT

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