Construction of the crude oil pipeline between Uganda and Tanzania kicksoff

Museveni (left) and Magufuli (right) after they laid a foundation stone to mark the start of construction of the crude oil pipeline from Hoima to Tanga.

The long-awaited works on taking Uganda’s crude oil to export markets started yesterday Saturday August 5, 2017 with President Yoweri Museveni and his Tanzanian counterpart Joseph Pombe Magufuli commissioning the construction of the 1,445km-long East African crude oil pipe line from Hoima district in Uganda to the Tanzanian port of Tanga.

President Museveni arrived in Tanzania on Friday evening for a two-day state visit.

The two leaders laid a foundation stone for the crude oil pipeline construction at foundation stone at Chongoleani, in the port city of Tanga.

The pipeline, estimated to cost $3.55 billion, will transport Uganda’s crude oil from Kabaale, in the western Hoima district, to Chongoleani peninsula, near the Tanga port in Tanzania and is expected to be completed by 2020.  The pipeline works will be undertaken by Total E&P, CNOOC and Tullow Oil together with the two governments of Uganda and Tanzania. The pipe line will on completion carry 216,000 barrels of crude oil for export daily.

Construction of the 1,445km line is expected to start at different points.

After the ceremony in Tanga, the two leaders are expected to also launch the building project in Hoima at a later date.

According to the project report, the 24-inch diameter pipeline will move 216,000 barrels of oil per day at a cost of $12.2 per barrel.

Museveni and Magufuli also used the occasion on Saturday to underscore the need for fast integration of the East African community so as to ease the joint planning, financing and implementation of major projects that are crucial for the development and transformation of the region.

Speaking during the ceremony, Museveni greatly thanked Magufuli, the Tanzanian government and the Tanzanian people for the numerous concessions they gave to the Ugandan government and partners that enabled the fast tracking of the project.

Tanzanians who attended the ceremony

He said because of the numerous concessions from the Tanzanian government, the cost of delivering a barrel of oil from Hoima to Tanga will be $12.2 per barrel, making Uganda’s crude oil propfitable even at today’s rate of $50 per barrel.

“On behalf of Ugandans I thank President Magufuli and our Tanzanian brothers for giving us the following concessions on the pipe line. There will be no pay transit tax, no Value Added Tax, no corporate income tax, gave us 20 years depreciation tax holiday, granted us a free corridor where the pipe line passes and promised to buy shares in the pipe line,” Museveni said.

The President implored all East African member states to look at the East African crude oil pipe line as an East African community asset, noting that with many discoveries of oil and gas deposits in many other countries in the region, the facility will be a vehicle for oil to the sea from all the East African countries.

“There already confirmed hydro-carbon deposits in Eastern Democratic Republic of Congo and Turkana and there are possibilities in Rwanda, Tanzania and Burundi and once these are confirmed the pipeline will be more useful for the region,” Mr. Museveni said.

The ceremony was also graced by local musicians

At the colourful ceremony at the ocean-side attended by thousands of Tanga residents and punctuated with song and dance, President Museveni said the East African countries are endowed with enough natural resources that can transform the region and get her people out of poverty if well utilized.

He noted that the region needed to work on stopping the culture of producing what we it does not consume and consuming what it does not produce that has greatly affected the balance of trade and enriched other people at the expense of our citizens.

“Our East African Community imports $33 billion per annum worth of goods and services while our exports are $13.8 billion, making us donate resources, jobs, taxes and income to the developed world to enhance their technology. Export led growth is very important and India and China can bear testimony and we need to focus on it,” said the President.

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