The laying of the Uganda-Tanzania crude oil pipeline is a step closer to commencement following the completion of a key engineering exercise.
The process, which started in 2016, mostly focused on technical requirements as well as estimating the cost of the project.
The firm which undertook the work, Gulf Interstate Engineering, said in Dar es Salaam yesterday that it completed the front end engineering design (Feed) early this month, paving way for the project developers to make the final investment decision (Fid).
Feed entails basic engineering conducted after completion of a conceptual design or feasibility study. At this stage, before the start of engineering, procurement and construction (EPC), various studies are carried out to figure out technical issues and estimate the investment cost.
“We have completed the Feed process which started in 2016. It mostly focused on technical requirements as well as arriving at a rough estimate for the project. This paves the way for the start of FID,” Gulf Interstate Engineering senior vice president Criss Shipman said during the crude oil stakeholders’ meeting.
The meeting deliberated on opportunities to be found in the project.
Mr Shipman said they had prepares drawings that the construction companies could work on.
Meanwhile, an official from oil giant Total, who asked not to be named because he was not authorised to speak to the media, said the focus was now on FID, which mostly entailed approving the project before its implementation could start.
He said once the project was approved, they would immediately start execution, adding that financing was not a challenge.
“The sponsors who have funded this meeting today are the ones who will be funding the project, and I can assure you that their pockets are very deep, so there is no problem in that area.”
Meanwhile, the acting assistant commissioner for oil in the Ministry of Energy, Ms Mwanamani Kidaya, said the government was currently waiting for the FID process to be completed before it could commit itself on how much it would contribute.
“The FID will make us aware of the risks and benefits of the project as well as the way forward. We will be able to commit ourselves on how much we will contribute after the process is finalised,” she said.
The pipeline, estimated to cost $3.55 billion, will transport Uganda’s crude oil from Kabaale, in the western Hoima District, to Chongoleani peninsula, near Tanga port in Tanzania.
According to the project report, the 24-inch diameter pipeline will move 216,000 barrels of oil per day at a cost of about $12.2 per barrel.
There will be related facilities such as coating plants and pipe storage yards, access roads, burrow pits, hydro-test dams, a marine terminal and a jetty.
The pipeline is expected to be completed by 2020.