Uganda will export oil with new pipe through Tanzania instead of Kenya

Uganda has decided to develop a major 1,400 km crude oil pipeline to export its oil production, through Tanzania instead of Kenya. Land-locked Uganda has crude oil reserves estimated between 2.6 and 6.5 Gbl and aims to start crude oil production by 2018 with full scale commercial operation as of 2020.

In August 2015, Uganda had reached a final decision on the route for a new crude oil pipeline, stretching from oil fields in western Uganda (border with the Democratic Republic of Congo) to the Kenyan coast. The pipeline would have followed an existing oil product pipelines in the north of the country to Lamu in Kenya, where an export port would be built. The pipeline was expected to be completed in 2018-2019.

However, in October 2015, the governments of Uganda and Tanzania, the Tanzanian Petroleum Development Corporation and Total E&P Uganda signed an Memorandum of Understanding (MoU) to explore the possibility of building a crude oil pipeline between the two countries. Security reasons, namely possible attacks by al-Shabab islamists from Somalia, prompted Uganda to select the Tanzanian option. The US$4bn project will stretch between the western region near Hoima, where large oil reserves have been discovered, and the existing port of Tanga, in north-eastern Tanzania. When completed, it will be the first major oil pipeline in East Africa. In addition, Tanzania committed to take an up to 8% stake in a proposed refinery in Uganda, that would process 60,000 bbl/d; the first 30,000 bbl/d stage could be commissioned as early as 2018 (second stage in 2019). A consortium led by RT Global Resources (Russia) won the tender to build the refinery but is still carrying out a feasibility study.

Kenya now plans to develop its own crude oil pipeline between the Lake Turkana basin to Lamu for export.