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Friday, March 4, 2016
Uganda, Tanzania, TPDC, and Total E&P Uganda signed a MoU regarding a pipeline that would ship Ugandan crude via Tanzania to the East African coast. The MoU sets out the development principles and provides for other participants to join in the process of assessing and developing this route option.
Previously Uganda had signed a MoU with Kenya to ship its crude through a pipeline to the Kenyan coast but Total wanted to explore other options.
The MoU creates a working framework for the potential development of a crude export pipeline from Hoima to Tanga Port in Tanzania. The objective is to select a route that will result in the lowest unit transportation cost that constitutes the most viable option for the crude export pipeline, a statement issued by Uganda’s Ministry of Energy and Mineral Development stated.
Dr Fred Kabagambe-Kaliisa, the Permanent Secretary of the Ministry said that the MoU also enables the parties to continue working together to fine tune studies and field work on the Tanga route in order to further appraise the merits of a crude export pipeline option through Tanzania 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 route to the East African Coast, our crude oil will be exported cheaply’’ said Dr. Kaliisa.
The Permanent Secretary went on to say that due diligence needed to be carried out, requiring technical work so as to inform Ugandans about the end-user tariffs adding that the MoU sets a stage for carrying out a detailed evaluation exercise
“As a country, we are evaluating the routes with the idea that we have the least cost route because we would like to ensure that our crude oil has value,” he said.
Uganda is currently undertaking a process to identify and assess the comparative merits of three pipeline routing options, two via Kenya to Mombasa and Lamu, and one via Tanzania to Tanga, in respect of the export of crude oil from Uganda to the international market. The objective is to select a route that will result in the lowest unit transportation cost and constitutes the most viable option for the pipeline project.
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