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Wednesday, April 13, 2016

Uganda reportedly set to confirm Tanzania as pipeline route

UGANDA is inching closer to a final decision on the route of its proposed crude oil pipeline to the Indian Ocean with Tanzania increasingly seeming to have won a fierce battle with rivals Kenya to host the crucial regional trade infrastructure.

According to senior officials in the Tanzanian Ministry of Energy and Minerals, the Ugandan government appears to have come to a firm conclusion that the pipeline should access the ocean via Tanga port instead of Kenya’s Lamu port.

This follows a crucial meeting on the matter attended by high-level government officials from all three East African countries in the Ugandan capital Kampala last week.

The Tanzanian delegation led by top ministry representatives are reported to have successfully made the country’s case for the pipeline to pass through Tanzania as a safer and more cost-effective option, despite Kenya's aggressive lobbying for the project."The conclusion and recommendations of the Ugandan government is that the Tanzania route provides the most economic and robust option for transportation of Uganda's crude oil because of the various advantages it has over the routes through Kenya," a senior ministry official told The Guardian.

"The Kaabale (Uganda)-Tanga route promotes the development of an integrated regional pipeline project for oilfields of Kenya, South Sudan, the Democratic Republic of the Congo, Tanzania, Rwanda and Burundi," the official added.

The French oil firm Total has affirmed its commitment and availability of funds to construct the $4 billion oil pipeline through Tanzania to Tanga despite Kenya’s still ongoing maneuvers.

“I understand there are issues being discussed but our position remains the same,” the company’s Uganda branch general manager Adewale Fayemi told a regional oil and gas industry conference in Dar es Salaam recently.

Fayemi said all the options – including a couple of proposed Kenya routes - had been carefully considered and Total still considered the Tanga route cheaper in the long run.

Total and the British firm Tullow Oil are partners and financiers of the Ugandan oil extraction project. China’s National Offshore Oil Companies is also a partner. The firms are eyeing to start producing an estimated 6.5 billion barrels of Ugandan crude by 2018.

The routes being considered were through the Kenyan south (Nairobi – Mombasa); Kenya north (Hoima - Lokichar – Lamu); and Tanzania (from the Albertine basin in western Uganda to the port of Tanga).

Meanwhile, renowned Kenyan lawyer Prof. Patrick Lumumba yesterday called for transparency in the process of selecting the Ugandan oil pipeline route instead of the current clandestine lobbying by Tanzania and Kenya.

Prof. Lumumba, who is currently director of the Kenya School of Law, made the comments ahead of the two-day global accountability conference on oil and gas organized by Wajibu Institute of Public Accountability (WIPA).

He said the process should involve and benefit all East African Community (EAC) member states, and noted that negotiations on the pipeline route should involve all the countries in the regional trade bloc for enhanced transparency.

“The matter could have been presented at a forum with the presence of all EAC member states”, he said, adding that it should be treated as an integrated matter.

According to the ex-Kenyan anti-corruption commission boss, almost all the EAC countries will benefit from the Ugandan oil discoveries at different levels.

He said Kenyans feel they were sidelined in the negotiations that led to Uganda and Tanzania agreeing on the pipeline passing through Tanga.

“Kenyans should have been given a chance to explain how economically or security-viable the pipeline could be if it passes through Lamu port”, Lumumba said.


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