30 January 2019

Uganda: Construction of Uganda-Tanzania Pipeline to Start in June

Dar es Salaam — Construction of the Uganda-Tanzania crude oil pipeline is expected to start in June once leaders of the two countries endorse agreements reached during negotiations. Energy minister Medard Kalemani said yesterday during a live broadcast on State Television.

According to him, energy ministers from Tanzania and Uganda and other stakeholders met last Friday in Kampala, Uganda to finalise discussions that will the pave way for formalisation of the project.

"Tanzania has completed eight core professional works that needed to be finalised after the foundation stone was laid and also before the construction can commence," he said.

Explaining, he said Tanzania needed to identify an area where the five crude oil storage tanks with a capacity of 2.5 million would installed.

He said the government in May last year completed the evaluation and compensation totalling Sh5 billion for residents affected by the project.

Tanzania, according to the minister, would by March this year finalise geological and geotechnical evaluations in Manyara, Singida Kagera and other regions along the pipeline route. The same process has been completed in Tanga.

Since the project's inauguration in August 2017, there have been a series of technical meetings between the governments of the two countries but there were a number of issues that had not yet been addressed.

Some of the pending issues were the registration of companies to be involved in the project, distribution of revenue, issues related to defence and security for both countries, and citizen participation in the implementation of the project.

The execution of the 1,445-km long underground crude oil pipeline from Hoima in Uganda to Tanga in Tanzania will cost approximately $3.5 billion.

Available data show that Tanzania has so far managed to register a total of 255 firms that are earmarked for various tenders related to the crude oil pipeline and other related projects.

Explaining about the project, the minister said 80 per cent of the pipeline will pass through eight regions of Tanzania, that include 28 districts, 126 villages and 232 wards thereby benefiting the country immensely.

"The pipeline will have 18 stations 16 of which are in Tanzania therefore bringing in huge opportunities including direct and indirect employment as well as an injection in government revenues," he said.

He challenged Tanzanians to be prepared, saying there will be 5000 jobs during construction of the pipeline and 1500 jobs when construction is completed.

Uganda has proven crude oil reserves of 6.5 billion barrels, about 2.2 billion of which is recoverable.

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