Mombasa is the windiest coastal town of Eastern Africa throughout the year. When the Mombasa Coast is not experiencing a monsoon season the climate becomes very stable and without much interest, you could be tempted to describe it as boring.
The winds come moving from northeast, and this pattern lasts from December to March. They correlate with the months when there’s most rain. Monsoon winds might be good for fun but certainly not for business.
So today, as Presidents Yoweri Museveni of Uganda and Kenya’s Uhuru Kenyatta meet today to discuss the possibility of having the crude oil pipeline run from Hoima to Lamu, a big question lingers: will Uganda choose Kenya over Tanzania where President John Pombe Magufuli has already announced that the construction will start in August, stirring the Nairobi waters leading to today’s meeting?
At the onset of the discussions close to two years ago, four issues
were raised by the Ugandan government as ‘must-get-addressed’, and these were: security, infrastructure, financing structure and the menacing monsoon winds.
Security
If the pipeline is to head to Kenya (northern route), it will have to travel for 1,120 Kms: from Hoima, through Lake Kyoga and Karamoja to Kenya’s Lokichar and land at Lamu port. Sources both in government and oil companies say the northern route, although shorter than the southern route to Tanga from Hoima through Masaka, Bukoba, Chinayanga and Singida, which is 1,410Km, poses several difficulties.
The oil companies say construction in the dry plains of Lokichar all the way to the port could be hard as the area is hardly with any
infrastructure like roads. It is also dogged with occasional raids by marauding rustlers. The oil companies are also wary of the insecurity in the area and fear risking a $4b (shs13 trillion) project.
Infrastructure and financing structure
The government of Kenya also had to guarantee a financing plan in the event that oil companies, which seem to be in favor of the Tanga port, choose to either take a back seat of ask for huge securities for the investment.
However, oil companies are in favor of the Tanga port simply because it
guarantees uninterrupted production unlike the port on the Mombasa coast line.
The Moonsoon winds
The existence of the menacing monsoon winds means that oil companies will have to relax production until the winds become friendly. It is so because floaters that are supposed to collect the crude and deposit into liners cannot float at the coast during heavy winds.
That means that there will be no production for four months from December through to March when the winds become friendly.
As a government strategic decision, Uganda will construct it’s
refinery with a least capacity of 30000 barrels of oil per day
production.
And, with the daily crude production capacity forecast estimated to be
120,000 barrels per day at peak production, the pipe line is supposed to suck out the excess crude to the coast for export.
A relaxation for four months because of Monsoon winds is what the oil companies want to avoid because it means a loss in money and also creates another expense of creating storage facilities for the over 90,000 barrels per day (bpd) that might remain in excess, after serving the refinery, over four months.
Meanwhile, at today’s meeting being attended by officials from the oil prospecting joint venture partnership of Tullow, Total and Cnooc, the world waits to hear what President Uhuru will put on the table as he seeks to elbow Tanzania out of the deal.
But all said and done, it is those four points, as raised to the Kenyan government by their Ugandan counterparts a while back that have to get positive response if Tanzania is to lose the bet.
