Uganda opts for Tanzania pipeline route

KAMPALA, April 25, 2016 – Uganda will export its crude through Tanzania, the government announced over the weekend, abandoning earlier plans for a pipeline route across Kenya. Uganda now envisions a pipeline originating in Hoima region and running for some 1,400 km to the Tanzanian port town of Tanga.

Estimated to cost around USD 4 billion, the project had in recent weeks evolved into a tug of war between Uganda, Kenya and Tanzania. Kenya argued that a tie-in with the Lamu Port-Southern Sudan-Ethiopia Transport Corridor projects would be in the best interest of the pipeline plan, which was first announced in August 2015. Kenyan President Uhuru Kenyatta and his Ugandan counterpart Yoweri Museveni held high-level meetings in March and April.

Uganda’s pipeline project is aimed to unlock the country’s crude reserves. The government estimates that the Lake Albert Rift basin alone holds 6.5 billion barrels of oil. First production is slated for 2018.

The choice for a pipeline route to Tanga was reportedly driven by security concerns on the side of Total. A northern route via Kenya would have put the project at risk of attacks by Somalia’s Al Shabab militants. Sources familiar with the matter also said the port of Tanga being operational worked in Tanzania’s favour. The pipeline is expected to become operational in 2020.

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