Uganda, Tanzania Sign Agreement to Start Construction Of $3.5 billion Oil Pipeline

Tanzania President Samia Suluhu Hassan and President Yoweri Museveni in Kampala on Sunday, April 12, 2021.

KAMPALA, Uganda— President Yoweri Museveni and Tanzania’s new leader Samia Suluhu Hassan, on Sunday, attended the signing of three accords to kick off the construction of a $3.5 billion East African Crude Oil Pipeline (EACOP) Tripartite Project.

The agreements included: a host government agreement for the pipeline, a tariff and transportation agreement, and a shareholding agreement.

Speaking at State House Entebbe, President Museveni said the oil pipeline deal will make a modest contribution to the development of the two countries.

“This pipeline could turn out to be a very important project that could serve the entire region in the long term. We could build a return pipeline to carry gas from Tanzania to Uganda and the entire region,” Museveni said.

He added, “moreover this project might be core of bigger developments if brothers in Congo and South Sudan choose to use it for their oil, at the maximum it can carry 230,000 barrels per day.”

On her part, Tanzanian President Hassan noted that the EACOP will address unemployment crisis, thereby not only benefiting Uganda and Tanzania alone but the entire region.

“The project will bring revenues to the regional countries and more than 10,000 jobs will be created,” she said.

Hassan added that EACOP will unleash the region’s potentials, and in return attract investors. 

“Our region is well-endowed with abundant resources. In order to fully and effectively exploit these resources, we need infrastructure” she added.

Partners in the pipeline agreement Total and China National Offshore Oil Corporation (CNOOC) also witnessed the signing of the agreements.

Total’s CEO, Patrick Pouyanné said the project would require investments of more than $10 billion to get the oil flowing.

“This is a major milestone for East Africa and the world. This project will deliver a lot of value to Uganda and Tanzania. It’s a very large project, one of the largest we should develop on this continent,” Pouyanné said.

Uganda Government geologists estimated total reserves at 6 billion barrels from a discovered crude reserve in the Albertine rift basin in the west of the country near the border with the Democratic Republic of Congo in 2006.

The crude oil is highly viscous, which necessitates heating to kept in a liquid state for easy flow.

The planned East African Crude Oil Pipeline, will be the longest electrically heated pipeline in the world. With a length of 1,445 kilometers (898 miles), it will run from the oilfields to Tanzania’s Indian Ocean seaport of Tanga.

The project has, however, faced objection from more than 250 local and international organizations who say it would pose immense threats to local communities, water supplies and biodiversity in Uganda, Tanzania, Democratic Republic of Congo and Kenya. 

The critics also sent letters to chief executives of 25 banks urging them not to extend loans to fund the pipeline.