Uganda enters deal with Tanzania to Construct Crude Oil Export Pipeline

pipeline OneThe government of Uganda has entered a memorandum of Understanding (MOU) with Tanzania to commence studies on an alternative Crude oil export Pipeline from Hoima to Tanga Port In Tanzania than the one earlier announced.

This MOU undermines earlier settlements between Uganda and Kenya on  1,380-kilometre route from Oil rich Albertine graben through Lokichar basin in Northern Kenya to the coastal town of Lamu.

However, the Ministry has defended the decision on the pipeline saying it was looking for a cost effective route to move its crude to the nearest market.

“The objective is to select a route that will result in the lowest unit transpiration cost and sonstitutes the most viable option for the pipeline project,” The Ministry  statement Read.

Last Month, a source from the Directorate of Petroleum who spoke to Uganda oil on condition of anonymity said the nation is under pressure from financiers to look for a cost effective and secure route, alternative to the the crude export pipeline that was earlier proposed.

Dr Fred Kabagambe-Kaliisa, the Permanent Secretary of Uganda’s Ministry of Energy and Mineral Development, said the deal enables the parties to continue working together with a view to achieving the lowest unit transportation cost for crude oil from Uganda.

“If we can be able to get least cost pipeline to Tanga, then our crude oil will be exported cheaply. We need to carryout due diligence. This requires real technical work to inform our citizens about the end-user tariffs and the Memorandum of Understanding sets a stage for carrying out detailed evaluation exercise,” he observed.

See Press Statement

Press Release…Tanzania-Uganda Oil Pipeline deal

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