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Oil firms start detailed plans for production

By Pascal Kwesiga

Added 7th August 2017 09:27 AM

The pipeline will be expected to move 216,000 barrels of oil per day to the international market from Hoima

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Presidents Yoweri Museveni and John Magufuli of Tanzania signed the Oil Pipeline Agreement in Tanzania in May.

The three oil firms, CNOOC, Total E&P and Tullow, have announced plans to begin detailed planning and execution of a series of activities following the laying of the foundation stone for the East African Crude Oil Pipeline (EACOP).

President Yoweri Museveni and his Tanzanian counterpart, John Magufuli, laid the foundation stone for the 1,445km pipeline at Chongoleani in Tanga region on Saturday.

The two leaders are also expected to lay another foundation stone in Hoima in few days’ time. The pipeline will be expected to move 216,000 barrels of oil per day to the international market from Hoima.

“Following the (laying of foundation stone) milestone, the Joint Venture partners will embark on a journey of detailed planning and execution……..the already ongoing studies such as Environment and Social Impact Assessments and Front End Engineering Design for the EACOP project,” a joint statement from oil companies reads.

The three companies are partners in Uganda’s upstream petroleum sector that includes exploration and production. The joint venture partners stated that they appreciate the efforts by Ugandan and Tanzanian governments in enabling the timely achievement of the development and commercialization of Uganda’s oil resources.

Uganda has discovered 6.5 billion barrels of petroleum resources in the 40% of the potential area in the Albertine region. Between 1.4 and 1.7 billion of the discovered petroleum resources could be pumped out of the ground.

The oil firms said the laying of the foundation stone for the world’s longest electrically heated pipeline following the signing of the inter-governmental agreement is a landmark development in the history of both countries.

“It signifies their (countries) commitment towards the fast tracked development of the 1,445km crude oil pipeline that will transport Uganda’s oil from Kabaale, Hoima in Uganda to the Chongoleani Peninsula near Tanga Port in Tanzania,” they added.

The three companies will undertake the construction of the pipeline estimated to cost $3.55bn, and the infrastructure is expected to boost foreign direct investment for Uganda and Tanzania by about 60%, according to the oil firms. Uganda and Tanzania have indicated interest to hold shares in the pipeline.

“It will open up the entire East African region to further opportunities for trade and socio - economic development,” the statement reads.

Once the oil companies agree on the shareholding in the project, according to the Government, they will be expected to take a Final Investment Decision (FID) before end of this year, and the Engineering, Procurement and Construction (EPC) will most likely start early next year.

The construction activities are expected to last three years. This implies that if construction begins in the early months of next year, the pipeline will be up and running anytime in 2020, the latest timeline for start of oil production.

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