Deal signed for construction of the $3.5 billion Uganda-Tanzania Pipeline

A deal has been signed for construction of the new Uganda-Tanzania pipeline which when completed will be the longest heated crude oil pipeline in the world
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The world’s longest heated crude oil pipeline is coming to East Africa after a $3.5 billion deal was signed off, paving the way for construction of the Uganda-Tanzania Pipeline.

Also known as the East African Crude Oil Pipeline, the new line will transport oil from Uganda’s fields in the west of the country 1445 km through Tanzania to the port of Tanza on the Indian Ocean.

The pipeline will enable Uganda to begin exporting significant amounts of oil for the first time. Reserves exceeding 6.5 billion barrels were discovered in 2006 with around 2.2 billion barrels being recoverable.

Initially, Uganda had wanted to construct a pipeline through Kenya to the port of Lamu. Concerns surrounding the security and cost of the project meant that it was shelved in favour of a shorter route through Tanzania.

French oil giant Total are leading the project along with Chinese company CNOOC and the governments of the two nations involved.

Building the Uganda-Tanzania Pipeline will bring a $16 billion investment to both Uganda and Tanzania and help to create 18,000 jobs in Tanzania alone. Once online, the pipeline will have a capacity of 216,000 barrels of crude oil per day.

In conjunction with the pipeline, a new $2.5 billion oil refinery is planned for western Uganda to process oil for use within the East African Community. The refinery will meet the petroleum product needs of Uganda and its regional neighbours with the remaining oil to be exported via the East African Crude Oil Pipeline.

A new airport, hospital and power station are to be built around the refinery. The 100 megawatt Nzizi Thermal Power Plant will use natural gas and heavy fuel oil as its raw material with the power generated integrated into the national power grid via a substation in Hoima.

As with most major pipeline construction projects, the plans are not without controversy. According to a joint report from the International Federation for Human Rights and Oxfam, more than 12,000 Ugandan families risk losing their land and livelihoods to the pipeline.

There are also environmental concerns stemming from drilling in Uganda. The pipeline itself will loop around the southern shores of Lake Victoria with conservationists warning that sensitive ecosystems are at risk.

Once completed, the Uganda-Tanzania Pipeline will be East Africa’s first major oil pipeline. As the world’s longest heated crude oil pipeline, it would take a place alongside some of the engineering marvels which make up the best and longest pipelines on Earth.

Total still need to agree a host agreement with Tanzania before construction can begin, but that is now deemed a formality. Tanzanian President John Magufuli agreed with his Ugandan counterpart President Yoweri Museveni that the remaining contracts should be fast tracked after years of delays to the project.

All being well, Total and Tanzania will sign their contract by December 2020, allowing construction to start in March 2021. Crude oil could then start being pumped from the ground in 2023-24.

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