Uganda president Yoweri Museveni and Tanzania counterpart John Magufuli agreed to accelerate the implementation of a crude oil pipeline project between the two nations and award the construction contract to multiple contractors.
The decision was reached during talks between the two leaders on the sidelines of the swearing in ceremony of Museveni in Kampala according to a statement from Tanzania presidency.
Uganda said in April it would build a pipeline for its oil through Tanzania rather than Kenya, which had wanted to secure the export route.
Picking a route is vital for oil firms to make final investment decisions on developing reserves found in Uganda and Kenya, which are among a string of hydrocarbon finds on Africa’s eastern seaboard. Tanzania has found gas offshore.
“I suggest we use the design and construct model to speed up implementation of the 1,410-km pipeline project … and award contracts to five or six different contractors to build different sections of the pipeline at the same time,” Magufuli’s office quoted him as saying.
“By doing that we will significantly reduce the time needed to build the oil pipeline and the entire project can be completed within just one year.”
Uganda discovered crude near its border with the Democratic Republic of Congo 10 years ago, but has yet to start production after repeated delays. Choosing a route to export the crude from the land-locked nation is a vital step.
France’s Total, London-listed Tullow Oil and China’s CNOOC have been pushing for a decision on a pipeline.