Uganda has entered into a memorandum of understanding with the Tanzanian government, detailing the principles of the crude oil export pipeline from Hoima to the port of Tanga.
The MoU was on Monday signed by the Uganda, Tanzania, the Tanzanian Petroleum Development Corporation and Total E&P Uganda, and provides for other participants to join in the process of assessing and developing this route option.
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 Permanent Secretary of Uganda’s Ministry of Energy and Mineral Development Dr Fred Kabagambe-Kaliisa, said the MoU would enable the parties to work 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.
“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.
He observed the need to carryout due diligence, which he said, will inform Ugandans about the end-user tariffs. “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.
In a press release, Bashir Hangi, the Communications Officer of Uganda’s Ministry of Energy and Mineral Development, said the there is need to identify a route that will result in the lowest unit transportation cost. Mr Hangi also disclosed that Government had signed an MoU with oil companies licensed in the country, for the commercialization of the oil and gas resources.
The Acting Permanent Secretary of Tanzania’s Ministry of Energy and Minerals Mr Ngosi Mwihava, said the crude oil export pipeline was the best mode of transportation especially considering the resources Uganda has in place. He also reiterated the need for due diligence. “This infrastructure will stand the test of time in our regional cooperation; the due diligence is a valid exercise because you have to justify the route you are going to consider to justify the least cost option,” Mr Mwihava said.
Meanwhile Mr Adewale Fayemi, the General Manager Total E & P Uganda, described the MoU as a milestone in achieving the least cost option to transport Uganda’s crude oil to the Indian Ocean coast. “We look forward to fine tune the process,” he said adding that Total E&P is committed to working with all the partners involved. Mr James Mataragio, the Managing Director TPDC, said the undertaking 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 Government of United Republic of Tanzania,” Mr Mataragio, said.