Governments of Tanzania, Uganda, French firm, Total E&P (Uganda) and the Tanzania Petroleum Development Corporation (TPDC) have signed a Memorandum of Understanding (MOU) for a crude oil export pipeline framework.
Uganda is currently undertaking a process to identify and assess the comparative merits of pipeline routing options via Tanzania to Tanga, (others are via Kenya to Mombasa and Lamu,) in respect of the export of crude oil from Uganda to the international market. The objective is to select a route that will result in the lowest unit transportation cost and constitutes the most viable option for the pipeline project.
“If we can be able to get a least cost pipeline route to the East African coast, our crude oil will be exported cheaply,’’ Dr Fred Kabagambe-Kaliisa, the Permanent Secretary of Uganda’s Ministry of Energy and Mineral Development, said, “the MoU also enables the signatories to continue working together to fine tune studies and field work on the Tanga route.”
According to a Ministry statement, the MoU creates a working framework for the potential development of a crude export pipeline from Hoima to Tanga Port in Tanzania. The MOU also provides for other participants to join in the process of assessing and developing this option. This is in order to further appraise the merits of a crude export pipeline option through Tanzania with a view to achieving the lowest unit transportation cost for crude oil from Uganda.
Ngosi Mwihava, the acting Permanent Secretary in Tanzania’s Ministry of Energy and Minerals said: “This infrastructure will stand the test of time in our regional cooperation. Tanzania is carrying out exploration work along the proposed route where any potential discovery will further enhance the economics of the project.”
Adewale Fayemi, the General Manager Total E & P (Uganda), described the MoU as a key milestone of achieving the least cost option to transport Uganda’s crude oil to the Indian Ocean. “We look forward to fine tune the process.”
James Mataragio, the TPDC Managing Director said: “This is a great project, which if executed; it will create opportunities for the people of Tanzania.”
The Uganda government has signed MoUs with oil companies licensed in the country for the commercialization of the oil and gas resources. It was agreed that the crude oil discovered in Uganda is commercialized through crude to power, refining and export of crude oil. In this regard efforts to establish a least cost pipeline route to the East African coast are being undertaken in partnership with industry and the respective partner nation-states where the crude export pipeline is likely to pass.