The Uganda-Tanzania Crude Oil Pipeline (UTCOP), also known as the East African Crude Oil Pipeline (EACOP), is under construction and intended to transport crude oil from Uganda's oil fields to the Port of Tanga, Tanzania on the Indian Ocean.
Video Uganda-Tanzania Crude Oil Pipeline
Location
The oil pipeline will start in Buseruka sub-county, Hoima District, in Uganda's Western Region. It will travel in a general south-easterly direction to pass through Masaka in Uganda, Bukoba in Tanzania, loop around the southern shores of Lake Victoria, continue through Shinyanga and Siginda, to end in Tanga, a distance of approximately 1,410 kilometres (880 mi).
Maps Uganda-Tanzania Crude Oil Pipeline
Background
Uganda has proven oil reserves exceeding 6.5 billion barrels, of which about 2.2 billion barrels are recoverable. The country plans to build a refinery in the Western Region to meet local and regional demand, with the rest exported via pipeline to the Indian Ocean coast.
Uganda previously agreed to build a joint Uganda-Kenya Crude Oil Pipeline to the Kenyan port of Lamu.
Concerns regarding security and cost, however, motivated parallel negotiations with Tanzania regarding a shorter and safer route to Port Tanga, with the support of the French petroleum conglomerate Total SA.
At the 13th Northern Corridor Heads of State Summit in Kampala in April 2016, Uganda officially chose the Tanzania route for its crude oil, in preference to the Mombasa or Lamu routes in Kenya. The presidents of both Kenya and Rwanda were present, along with representatives from Ethiopia, South Sudan, and Tanzania. At the same summit, President Uhuru Kenyatta announced that Kenya would build the Kenya Crude Oil Pipeline on its own, thereby abandoning the Uganda-Kenya Crude Oil Pipeline.
The construction budget for the 1,445 kilometres (898 mi) pipeline is US$3.5 billion. The pipeline is planned to have a capacity of 216,000 barrels of crude oil per day. It will be 24 inches (61 cm) in diameter, and Uganda will pay Tanzania US$12.20 for every barrel flowing through the pipeline.
Cost, funding, and timetable
Construction was originally planned to start in August 2016 and last three years at a budgeted cost of US$4 billion, providing approximately 15,000 construction jobs and 1,000 to 2,000 permanent jobs. In March 2016, the Daily Monitor newspaper reported that Total E&P was prepared to spend US$4 billion (UGX:13 trillion) to fund construction of this pipeline. Following meetings between delegations led by the oil ministers of Tanzania and Uganda, held in Hoima in July 2016, it was announced that construction of the 1,443 kilometres (897 mi) pipeline would begin in January 2017. Completion is planned for 2020.
Ownership
As of August 2017, the list of potential equity partners included:
- Uganda National Oil Company, the national oil company of Uganda
- Tanzania Petroleum Development Corporation, the national oil company of Tanzania
- Total SA
- Tullow Oil
- China National Offshore Oil Corporation (CNOOC)
Negotiations and the search for international lenders are ongoing. Uganda and Tanzania are being advised by Standard Bank of South Africa, while Total SA is being advised by Sumitomo Mitsui Banking Corporation. The London-based firm law firm Clifford Chance is advising Total SA on legal matters, while CNOOC is advised by the Imperial Bank of China.
Oil refinery
An oil refinery is planned to be constructed in western Uganda to process the oil for exports within the East African Community. The US$2.5 billion project is to be developed under a public-private partnership, with 50 percent of the project owned by a private developer and 10 percent owned by Jk Minerals Africa a South Africa-based company. The remaining 40 percent will be distributed among east African countries. On 30 April 2016, Tanzania agreed to buy 8 percent of the shares in the refinery for US$150.4 million.
Recent developments
In January 2018, the results of the Front End Engineering Design (FEED), were made public, both in Uganda and Tanzania, by Gulf Interstate Engineering (GIE), a Houston-based company that carried out the design at a total cost of US$11.5 million. The pipeline will total 1,445 kilometres (898 mi), of which 296 kilometres (184 mi) (21 percent) will be in Uganda and 1,149 kilometres (714 mi) (79 percent) will be in Tanzania. The pipeline will measure 24 inches (61 cm) in diameter and will be insulated and heated. There will be above-ground facilities, including a marine storage terminal with export facilities near port Tanga. The total cost of construction is budgeted at US$3.55 billion.
See also
- Petroleum Authority of Uganda
- Kenya-Uganda-Rwanda Petroleum Products Pipeline
- Hoima-Kampala Petroleum Products Pipeline
References
External links
- Oil pipeline project a step closer to commencement As at 23 January 2018.
- East Africa: DR Congo Shows Interest As Uganda-Tanga Port Oil Pipeline Preps in Top Gear
- Uganda, Tanzania discuss oil pipeline
Source of article : Wikipedia
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