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Uganda and Tanzania sign agreement to build $3.5bn oil pipeline

18 September 2020

Tanzania and Uganda signed an agreement on September 13 to allow for the construction of a 989 mile (1,445km) long crude oil pipeline from Uganda's oil fields to Tanzania's port of Tanga on Africa's eastern coast. The pipeline will cost around $3.5bn to construct.

Proposed route of the pipeline - Image: Wikimedia / User: Sputnik
Proposed route of the pipeline - Image: Wikimedia / User: Sputnik

The ceremony on September 13 was attended by both Tanzania's President John Magufuli and Uganda's President Yoweri Museveni. The Uganda–Tanzania Crude Oil Pipeline (UTCOP), also known as the East African Crude Oil Pipeline (EACOP), is needed so that Uganda can begin commercial production after discovering oil reserves in 2006.

A Tanzania government spokesman announced on Twitter that 80% of the pipeline would run through Tanzania, generating 7.5 trillion shillings ($3.24 billion) for the country and creating over 18,000 jobs over the next 25 years.

No announcement has been made about when construction will begin on the pipeline, however it is expected to start by the end of 2020. Construction of the pipeline could take up to three years and will carry almost 200,000 barrels per day.  

The pipeline agreement on September 13 came days after French oil major Total reached an agreement with Uganda protecting its rights and obligations in the pipeline's construction and operation, Reuters news agency reports. Total became the major shareholder in Uganda’s onshore oilfields after buying British company Tullow Oil’s entire stake in April for $575 million.
China’s CNOOC is a partner in the onshore project which produces 230,000 barrels per day.

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