The construction of East African Crude Oil Pipeline (EACOP) will soon take shape going by Tanzania’s allocation of a budget to fast track deliberations on four key areas and compensations for the implementation of the project.
Tanzania has set aside about US $430 000 from its 2020/21 budget to finance the said tasks.
Tanzanian minister of energy, Dr Medard Kalemani, recently stated that the priorities at hand before April 2021 will be to complete the host government agreements (HGA), shareholders’ agreement (SHA), land lease agreement (LLA), the port agreement (PA) and the compensation for the affected people whose lands the project will pass through.
Conclusion of the four agreements will lead to arriving at Final Investment Decision (FID) which would set the path for the project development phase. Once FID is undertaken, the construction will start and will take about 3 years to complete.
Dr Kalemani revealed that the construction may start in April, 2021 to which oil production may start in 2024. The environmental impact study has been conducted and communities sensitized.
READ: Tullow oil agrees to sale of assets to Total Uganda
The Uganda-Tanzania pipeline is a 1,443km crude oil export pipeline that will transport Uganda’s crude oil from Hoima in Uganda to the Chongoleani peninsula near Tanga port in Tanzania and is expected to cost US $3.5 billion.
Upon completion, the East African Crude Oil Pipeline (EACOP) will be the World’s longest electrically heated crude oil pipeline. Starting in Uganda’s Albertine Graben and terminating at Tanga in Tanzania. Due to the viscous and waxy nature of the crude oil, the pipeline will be heated all through to the final destination.
The pipeline will be concealed underground to minimize on environmental impact. However, some facilities with minimal environmental and social impact will be situated above the ground.
The Marine Export Storage Terminal and the Load-Out Facility will be located north of Tanga port over the Chongoleani peninsula. The crude oil will be stored in the terminal before being shipped out by vessels which will be loaded at a sheltered deep-water site.
The East African Crude Oil
Pipeline will create exploration opportunities for the East African region with potential investments.
Total East Africa Midstream B.V. (TEAM B.V.) is currently the custodian of the project.
In May, Tullow and Total E&P Uganda B.V. (Total Uganda) signed a Sale and Purchase Agreement (SPA) in which Tullow agreed to transfer the proposed East African Crude Oil Pipeline (EACOP) System (the Uganda Interests) to Total Uganda for cash consideration of US $575 million plus potential contingent payments after first oil (the Transaction).
The agreement also included the transfer of four other oil blocks in Uganda.
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