The Tanzanian government has signed an intergovernmental agreement (IGA) with Uganda for the construction of the 1,445 km East Africa Crude Oil Pipeline (EACOP) project. Read also: Tullow Oil sell the stake in the East African crude oil pipeline system In a statement, Pierre Jessua, the managing director of Total E-P Uganda said that, because of the agreement, they have reached an important milestone that paves the way for the final investment decision in the coming months. “We look forward to concluding a similar HGA with the Tanzanian government and finalizing the tendering process for all major engineering, procurement and construction contracts,” he said. The EACOP plan consists of a 24-inch pipeline isolated and buried with two pumping stations in Uganda and four in Tanzania. There will also be a Navy export terminal. The pipeline will be 296 km in Uganda and 1,147 km in Tanzania. The East African Crude Oil Pipeline (EACOP) has signed a host government (HGA) agreement with Tanzania, as plans for the development of Ugandan oil near the finish line. Uganda and Tanzania have signed a contract to build the first major oil pipeline in East Africa. It comes just two days after Kampala signed a host government agreement with French oil giant Total. About 80% of the pipeline will pass through Tanzania. This means that the project is expected to create thousands of jobs in Tanzania, and probably a good reason to sign a similar agreement with Total.
President Magufuli added that the country would use Uganda`s experience to search for oil in several of its regions. “If we beat oil, we will simply link these areas to the East African crude oil pipeline,” Magufuli said at the signing ceremony with his Ugandan counterpart on Sunday. Uganda discovered oil reserves in 2006 and needs the 1,445 km East African pipeline project to begin commercial production. The pipeline is estimated at $3.5 billion, according to both governments. In September, Tanzanian President John Magufuli met with his Ugandan counterpart, Yoweri Museveni. At that meeting, they both agreed to move the HGA forward. These follow the Intergovernmental Agreement of May 2017. In April, Total purchased Tullow`s entire 33.3% stake in licenses in Uganda, as well as its stake in the pipeline for $575 million. In addition to the Ugandan and Tanzanian governments, it will now develop the pipeline with CNOOC Ltd., a subsidiary of the Chinese oil company. The pipeline construction agreement comes days after French oil group Total said it had reached an agreement with Uganda to protect its rights and obligations during the construction and operation of the pipeline, known as the host government`s agreement.
The signing of the agreement between the two East African countries comes a day after Uganda and the French oil and gas multinational Total reached an agreement reaching an agreement between the host government for the country`s export pipeline project and the Uganda National Oil Company`s terms of membership in the project.