The leaders of Tanzania and Uganda laid a foundation stone on for the construction of a $3.55 B-crude export pipeline that would pump Ugandan oil for international markets.
The 1,445 km-project set for completion by 2020 will stretch from western Uganda – where oil was discovered in 2006, to Indian Ocean seaport of Tanga in Tanzania.
The project will become “the longest electrically heated crude oil pipeline in the world,” said Guy Maurice, Senior Vice President of Africa at Total Exploration and Production.
President of Uganda Yoweri Museven together with John Magufuli of Tanzania urged the three joint venture partners to speed up construction of the pipeline.
“We don’t need to delay the completion of the project for almost three years and once the project starts it will be unstop till completion – and it its before 2020 the better.” Magufuli
Uganda estimates its crude reserves at 6.5 barrel, while recoverable reserves are seen at between 1.4 barrel and 1.7 barrel [bbl].
Uganda choose Tanzania over its neighbor Kenya as the route for the proposed 24-in export pipeline because it was a “least cost and least risky” option.
“Tanzania offered several concessions to make the pipeline profitable in spite of the falling global crude oil prices,” said Museveni.
Tanzania agreed to waive taxes, offered to take up shares in the pipeline project and charge a tariff of $12.2/barrel to make the project feasible, he said.