Uganda and Kenya have finally settled on 1,380-kilometre Crude Oil pipeline which will run from Uganda’s Oil rich Albertine graben through Lokichar basin in Northern Kenya to the coastal town of Lamu.
The announcement of the agreement is a climax of a series of bilateral talks between the two countries in the respective regional northern corridor summits, in which key decisions such as the selection of the firm to conduct the feasibility study were considered.
Final decisions on the project estimated at $400 billion were arrived at a meeting between Ugandan President Yoweri Museveni and his counterpart Kenyan President Uhuru Kenyatta in Kampala. Uhuru was on an official three days visit to Kampala. The world bank has pledges $54 billion contribution to the project.
Speaking to Ugandan Parliament in Kampala, Uhuru said Kenya is committed to join hands with Uganda and the rest of the region to build a robust oil industry and develop a stronger value chain system to open opportunities for the greater benefit of the region.
“We are going to build pipelines for crude oil and refined petroleum products, as well as to join you, alongside our other East African partners, in the development of an oil refinery here in Uganda whose impact will be regional,” Kenyatta said.
It is not clear how the two nations will cost share on the project. However, speaking to the Daily nation newspaper in Nairobi, Kenya’s petroleum legal adviser, Daniel Kiptoo, said: “We will give a clear update detailing financing of the pipeline, tendering for the construction firm and when construction will commence.”
Uganda Oil has learnt that the two countries also agreed to constitute a joint a financial advisory team that will help to devise a funding model for the project. The two countries are eyeing upstream oil firms and private investors.
The two countries had earlier assigned respective ministries to develop a cost effective pipeline which will serve both countries including south Sudan and Ethiopia. The agreement has settled the debate which has been in the offing for over a year.
The project is expected to commence with Immediate effect.