Tanzanian President Suluhu expected in Uganda on Sunday for oil pipeline deal

Tanzania's President Samia Hassan Suluhu expected in Uganda for oil pipeline deal on Sunday, April 11, 2021.

Uganda will on Sunday, April 11, 2021, host Tanzania’s President, Samia Suluhu Hassan, for a meeting aimed at signing the oil pipeline deal, according to a top official from the Ministry of Foreign Affairs.

“The Tanzanian president will be on her journey in a few hours for talks which will climax with the signing ceremony on Sunday,” the official said.

This is President Suluhu’s first state visit since her elevation to replace the late Gen Dr John Pombe Joseph Magufuli, as the president of Tanzania last month.

“Something major is expected to happen this weekend, regarding Uganda’s oil,” confirmed Herbert Ssempogo, Senior Corporate Affairs Officer at the Uganda National Oil Company (UNOC), without giving details.

The meeting at Entebbe State House will see the Final Investment Decision (FID) signed; marking the beginning of the construction of the crude oil pipeline from Hoima to Tanga in Tanzania.

The signing event for the oil pipeline deal was first scheduled for March 22, 2021 before it was rescheduled following the death of then-President, Gen Dr John Pombe Joseph Magufuli, five days earlier on March, 17.

The final talks before the final deal is signed touch on the crude oil transportation, the transport tariffs as well as the shareholding structure of the East African Crude Oil Pipeline Company, EACOP. 

According to the current structure, Total SA owns 45 per cent shares in the company, while China National Offshore Oil Corporation (CNOOC) holds 35 per cent.

Another 15 per cent is held by the government of Uganda through the UNOC, with the other 5 per cent held by Tanzania through the Tanzania Petroleum Development Corporation. Uganda first discovered commercially viable oil deposits in 2007, but production dates have been postponed several times by legal and tax disputes.

The East African Crude Oil Pipeline (EACOP) is a 1,445-kilometre-long pipeline from the oil wells in western Uganda in Hoima district to Tanzania’s seaport of Tanga.

The pipeline will cover 296km in Uganda passing through Hoima, Kyankwanzi, Mubende, Gomba, Kyotera, Lwengo, Ssembabule, Rakai and Kikuube and 1443km in Tanzania through the regions of Kagera, Gieta, Shinyanga, Tabora, Singida, Dodoma, Manyara and Tanga.

By signing the FID, construction of the 1,445-kilometre-long pipeline will then kick-off having been delayed by the Covid-19 pandemic.

The $3.5b oil pipeline project is the longest electrically heated pipeline in the world. The pipeline will be heated because Uganda’s oil is waxy contrary to some other countries that have sweet oil.

Uganda has about 1.7 billion barrels of recoverable oil discovered in the Albertine Graben on the border between Uganda and DR Congo at the Kingfisher and Tilenga fields.

The two oil fields are operated by CNOOC and Total S.A.

The pipeline project is being implemented by a joint venture of CNOOC and Total; Uganda government through the Uganda National Oil Company (UNOC) and Tanzania Petroleum Development Corporation.

The project is expected to create jobs, help in technology transfer, creation of new infrastructure and enhance trade between Uganda and Tanzania and the East African region at large.

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