Uganda and Tanzania have today (Sunday), April 11, 2021, signed the East African Crude Oil Pipeline (EACOP) pact signaling the start of the construction of the Shs37t ($3.5b) pipeline that will transport Uganda’s crude oil from Hoima to Port Tanga in Tanzania.
The signing of the multi-billion dollar deal took place at the launch of the Tilenga Development Project at State House Entebbe this (Sunday) afternoon.
Among the agreements signed between the officials from the government of Uganda and Tanzania and the oil companies including China National Offshore Oil Corporation (CNOOC) and France’s Total E&P are; Host Government agreement and the Tariff and Transportation agreement.
The Tripartite deal that was supposed to be signed in March was postponed following the death of Tanzania’s former President, Dr John Pombe Magufuli.
Speaking after the signing of the agreement that is over $10b, President Yoweri Museveni, said “we can use the same pipeline corridor to have a return gas pipeline to supply Tanzania and Mozambique gas to Uganda. Our brother countries have a lot of gas that we can use here in Uganda.”
Tanzanian President, Samia Suluhu Hassan, said the signing of this agreement was an auspicious occasion not only for Uganda and Tanzania but for the entire East African region.
“As we are all aware, this project will have an impact on social economic development and geostrategic dynamics,” she said.
Mr Patrick Pouyanne, Total E&P Chief Executive Officer, said “this is a major milestone for East Africa and the world. This project will deliver a lot of value to Uganda and Tanzania”.
The construction of the pipeline is expected to take four years for the more than three billion barrels of oil to start flowing out of the ground. If complete, it will be the longest heated crude oil pipeline line in the world.
The anticipated benefits of the project include job creation, local content, new infrastructure, logistics development, technology transfer and enhancement of the trade corridor between Uganda, Tanzania, East Africa and internationally.
Total E&P Uganda Limited is the majority shareholder in the deal with 72 per cent followed by Uganda with 15 per cent, CNOOC with eight per cent while the Tanzanian government holds five per cent.
All those entities will be involved in the construction of the EACOP.
The EACOP is a 1,443km crude oil export infrastructure that will transport Uganda’s crude oil from Kabaale village in Hoima district to the Chongoleani peninsula near Port Tanga in Tanzania to the international market.