Government of Uganda signs MoU with Government of Tanzania, Tanzania Petroleum Development Corporation and Total E&P Uganda on crude oil export pipeline framework
KAMPALA 12 OCTOBER 2015;
Government of the Republic of Uganda, the Government of the United Republic of Tanzania, the Tanzanian Petroleum Development Corporation and Total E&P Uganda have a today signed a Memorandum of Understanding on the crude oil pipeline development principles. The MOU also provides for other participants to join in the process of assessing and developing this route option.
The MoU creates a working framework for the potential development of a crude export pipeline from Hoima to Tanga Port of 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. .
Dr Fred Kabagambe-Kaliisa, the Permanent Secretary of Uganda’s Ministry of Energy and Mineral Development, says 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 the least cost pipeline route to the East African Coast, our crude oil will be exported cheaply’’ said Dr. Kaliisa. He observed the need to carryout due diligence which he said will require 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.
Mr. Ngosi Mwihava, the Ag. Permanent Secretary of Tanzania’s Ministry of Energy and Minerals, said the crude oil export pipeline was the best mode of transportation especially considering the resources Uganda has in place. He reiterated the need for due diligence adding that the Tanzania route provides security for the pipeline
“This infrastructure will stand the test of time in our regional cooperation" he said. He added that Tanzania is carrying out exploration work along the proposed route where any potential discovery will further enhance the economics of the project. "The route is more secure as a result of peace that has prevailed in Tanzania for many years which facilitates the development of the infrastructure and its operation. The due diligence is valid exercise because you have to justify the route you are going to consider to justify the least cost option,” he said
Adewale Fayemi, the General Manager Total E & P Uganda, described the MoU as a key milestone of achieving the least cost option to transport Uganda’s crude oil to the Indian Ocean Coast, and said they look forward to fine tuning the process adding that Total E&P is committed to supporting the route and collaborating with all the partners involved. .
James Mataragio, the Managing Director TPDC, said the undertaking is a great project, which if executed, will create opportunities for the people of Tanzania
“This project is going to open new investment opportunities, and create jobs for citizens of both countries. We have that experience required to build and manage pipelines. I want to assure Ugandans that they have got all the support from TPDC and the Government of United Republic of Tanzania” said Mr. Mataragio.
Government of Uganda signed a Memorandum of Understanding with the oil companies licensed in the country for the commercialization of the oil and gas resources, it was agreed that the crude oil discovered in Uganda is commercialized through crude to power, refining and export of crude oil. In this regard efforts to establish a least cost pipeline route to the East African Coast are being undertaken in partnership with the industry and the respective Partner States where the crude export pipeline is likely to pass.
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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