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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 travelled to Kampala to finalize the deal with his Ugandan counterpart, Yoweri Museveni. Total chairman and chief executive Patrick Pouyanne was 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. 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.

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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 Uganda Lake Albert development project including the East African Crude Oil Pipeline in 2020. Total, now a majority shareholder and CNOOC are now headed into 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.

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