Uganda and Tanzania inaugurate EACOP

EACOPThe pipeline projects aims to unlock the potential of economic growth in the east African countries. (Image source: rickz/Flickr)Uganda and Tanzania have inaugurated the East Africa Crude Oil Pipeline (EACOP), a 1,445km pipeline which will terminate at the Indian Ocean port of Tanga

EACOP, which is required to ensure the flow of Uganda’s waxy crude, is expected to be one of the longest heated pipelines in the world, with an estimated cost of US$3.5bn.

The project’s front-end engineering and design (FEED) work has been scheduled to be completed by the end of the year and a final investment decision (FID) is expected in next few months.

The construction of the project will be undertaken by a joint venture company which consists of the government of Uganda and Tanzania along with Total, Tullow Oil and China National Offshore Operating Co. (CNOOC). All the companies are working together to develop Uganda’s estimated 6.5 bbl of oil reserves, of which 1.7bn are estimated as recoverable.

With Tanzania offering Uganda a 20-year tax holiday and a free right of way to construct the pipeline to secure the deal, the Uganda government has changed direction in 2016. Tanzania will receive a transit fee of US$12.20 per barrel.

The Ugandan government said that it is politically committed to the EACOP project.

In August 2016, Uganda selected the Albertine Graben Consortium, which is led by General Electric (GE), as the favoured bidder for the two-phase refinery project in Hoima.

The country was compelled to re-tender the project after the failing of negotiations with Russia’s RT Global Resources and South Korea’s SK Engineering and Construction.

According to the government of Uganda, it is planning to keep a stake of 40 per cent in the refinery and sell shares to neighbouring countries on the basis that they will import petroleum products from the facility.

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