Two East African countries, Uganda and Tanzania have signed an agreement allowing for the construction of a 1,445 km East Africa Oil Pipeline (EACOP) project.
President Yoweri Museveni of Uganda and his Tanzanian counterpart, President Pombe Maghufuli attended the signing ceremony.
The commencement date has not been announced but last week, the Government of Uganda and French oil firm Total finalized and signed the Host Government Agreement (HGA) that will bring the oil firm and its partners closer to starting the construction of East Africa Crude Oil Pipeline (EACOP) project.
The ceremony, presided over by President Museveni, took place in the company of Total Chairman and Chief Executive Officer – Mr. Patrick Pouyanne.
Uganda’s Energy and Mineral Development Minister – Mary-Gorett Kitutu and Total Exploration and Production President for Africa Nicolas Terraz appended their signatures on the HGA indicating that the two parties have reached agreement on the commercial framework for the Lake Albert Development Project. The HGA also represents significant progress towards achieving the Final Investment Decision (FID) which is expected later in the year.
East Africa oil pipeline will be the World’s longest electrically heated crude oil pipeline, 1,445-km long, starting in Uganda’s Albertine Graben and terminating at Tanga in Tanzania. It will cost US $3.5 billion to complete the project.
Total stated that major milestones have been reached and the way paved to the Final Investment Decision which will take place in the coming months.
READ: East African Oil Pipeline talks in the offing
According to Total, a similar HGA will be concluded with the Government of Tanzania and the tendering process for all major engineering, procurement and construction contracts will be completed.
In July, Tanzania allocated a budget of about US $430 000 to fast track deliberations on four key areas and compensations for the implementation of the project. The key areas included the host government agreements (HGA), shareholders’ agreement (SHA), land lease agreement (LLA), the port agreement (PA) and the compensations, which would lead to arriving at Final Investment Decision (FID).
President Museveni and Mr. Pouyanne also discussed the possibilities of Uganda National Oil Company joining the East Africa Crude Oil Pipeline project.
Total is the major shareholder in Uganda’s oil fields after buying Tullow Oil’s entire stake in jointly-held onshore fields in Uganda for US $575 million in April.
