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Uganda and Tanzania to sign US $3.5bn pipeline deal

The government of Uganda and Tanzania have rescheduled the signing of a Host Government Agreement for the East Africa crude oil pipeline to end of June this year.

Uganda’s Energy Minister, Irene Muloni said that the decision came after week-long negotiations on key issues between Ministers from both countries. The Minister also affirmed that preparation for the pipeline construction have not been affected by the negotiation process.

Dr. Medard Kilimani, Tanzania’s energy Minister disclosed that they have located a potential site where five oil storage tanks that would store half million liter of oil will be constructed.

Also read: Impact Assessment report for Uganda-Tanzania pipeline complete

Host Government Agreement

The Host government Agreement seeks to ensure that both countries benefit to the maximal from the deal in regards to the shipping or transporting of the crude oil to the international market.

Both Uganda and Tanzania are expected to sign an agreement with the pipeline company. Signing of the Host government agreement will lead to the construction process that will take three years to complete.

Uganda’s Energy and Mineral Development Minister, Engineer Irene Muloni disclosed that since last year April, a draft of the Host government Agreement has remained pending awaiting endorsement of the president. The countries had agreed to have the first oil by 2020 but this was pushed back until they complete the negotiations process.

EACOP project

Since confirmation of existing commercial oil quantity in Lake Albert basin in Uganda in 2006, CNOOC LTD, TOTAL and TULLOW PLC in Uganda moved to the development stage. The oil is set to be moved through a 1,443km pipeline that will transport Uganda’s crude oil Kabaale – Hoima in Uganda to the Tanga port in Tanzania.

To ensure minimal environmental and social impact, the pipeline will be buried while some facilities above the ground. Currently, the National Environmental Management Authority (NEMA) are reviewing the Environmental Social Impact Assessment (ESIA) report that was handed over last week by the EACOP.

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