Energy Minister Irene Muloni and Tanzanian Constitution Minister Prof. John Palamagamba Kabudi, have signed an Inter-Government Agreement on the Crude oil pipeline that will cost US $1.55bn.
The project will create 100,000 jobs for the nationals of both countries especially in regard to provision of local content, Ms. Muloni said at the signing of the agreement at Serena Hotel.
The pipeline is expected to be the world’s longest electrically heated, starting from Kabaale in Hoima to the port of Tanga in Tanzania and carrying 260k barrels per day during peak of exploitation.
However, the Agreement is to be taken to the Parliaments of the two countries for ratification before sharing of details with the public.
On Monday May 21, 2017, Presidents Yoweri Museveni and John Pombe Magufuli signed the agreement that is expected to strengthen the bond between the two countries in terms of business and oil sector.
The 1400km pipeline from Hoima to Tanga was least cost route for transporting crude oil at an estimated tariff of US$12.2 per barrel.
Uganda is to undertake the pipeline investment as a private driven venture with government interests taken by the National Oil Company
‘’I am extremely happy that the two Governments of Uganda and Tanzania have finally made this historical agreement’’. Muloni said after endorsing her signature.
The Front End Engineering Design (FEED) for pipeline is expected to be completed by August 2017 and the Final Investment Decision will be made by December 2017.
‘Our target and a roadmap has been established to list down the activities that must be carried out between now and 2020 when oil is expected to flow,” Minister Muloni said.
Prof. Kabudi, who signed on behalf of Tanzania, lauded president Magufuli for trusting him to initiate the agreement, and the Government of China for helping the two countries that are in need for this development.
“The government of Tanzania has no hesitation in establishment of this project, if it’s finishing it by 2020, then it will be 2020,” Prof. Kabudi said.
