Construction of Uganda – Tanga Port Oil Pipeline to Commence in August 2016

 

 

The construction of the $4billion pipeline is slated to begin in August, pending ongoing discussions between Uganda and Tanzania and the investors. The pipeline is envisaged to transport crude oil from Kabale (Uganda) to Tanga Port (Tanzania).

Dr James Mataragio, the M.D of Tanzania Petroleum Development Corporation (TPDC) said in a recent statement that the 24-inch pipeline which will cover 1,403 kilometeres is expected to convey 200,000 barrels of crude oil per day. He added that “Tanzania has been chosen as a priority route due to a number of factors one of which is its experience in implementing gas and oil transportation projects through pipelines such as the 542-km Mtwara-Dar es Salaam gas channel.”

Mr. Mataragio also said that among others, the ongoing discussions are meant to spell out how the government of Tanzania would collect its revenues from the mega project. Construction of the pipeline is expected to take three years.”Last week, President John Magufuli and his Ugandan counterpart Yoweri Museveni met in Arusha ahead of the 17thEAC Heads of State Summit where they discussed the ambitious project.

Besides its experience in pipeline infrastructure, Tanzania boasts of its natural port in Tanga and the fact that the tube will be passing in an area with low population – hence the minimal compensation for residents along the entire project length. “What is more, the route from Kabale to Tanga is flat and with no reserved areas such as national parks or game reserves.

The pipeline will pass through Kagera, Shinyanga, Tabora and Singida to Tanga and this will as well help to spur oil and gas exploration along the route,” Dr Mataragio stated. According to the TPDC boss, the governments of Tanzania and Uganda signed a Memorandum of Understanding (MoU) for implementation of the venture in October, last year. The project is expected to create 15,000 jobs during its execution after which it will employ about between 1,000 and 2,000 people.

“The Tanzania Railway Limited (TRL) could on the other hand benefit from the venture through transportation of 123,000 pipes during the construction phase. The project will as well enable us to upgrade the Tanga port and road network in the northern corridor,” he explained.

The corridor to be created, Dr Mataragio said, could be used in the future to put up pipeline infrastructure to convey natural gas to Northern and Lake Zone regions. Uganda has so far discovered 6.5 billion barrels of the precious liquid along the Lake Albert basin.

The first finding was made by Hardman Resources in 2006, which was later acquired by Tullow Oil.

It is thought that Uganda favours the Tanga route since Kenya could be a soft target for terrorism.

The decision forces Kenya to go it alone on the pipeline construction to transport its oil from South Lokichar to Lamu port. Kenya was banking on the success of the LAPSSET project for which preliminary data showed combined production from South Sudan, Uganda and Kenya would lead to a total of 430,000 barrels per day (bpd) being pumped through the joint northern facility.

The Kenya government now needs a new strategy to fast-track the building of its 868 kilometre crude oil pipeline, which is estimated to cost $3 billion by the Lapsset Corridor Development Authority (LCDA).

Given the waxy nature of Kenya and Uganda’s crude oil, both pipelines would require to be heated to prevent flow assurance problems.

Data from Kenya’s energy ministry and the LCDA showed that Hoima was to have crude oil storage tanks of 127,200m³ and a 24 inch, 583 kilometre pipeline to Lokichar with a peak elevation of 1,430metres above sea level.

On the other hand, Lokichar was to have a crude oil storage tank of half the size in Hoima and a 30-inch , 868 kilometre pipeline to Lamu, where the crude oil would then be stored in a 190,785m³ terminal with a heating station before it would be loaded to sea tankers for export.

 
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