Although Tanzania and Uganda recently signed a mega deal for construction of the region’s crude oil Pipeline, the kick off date has not yet been revealed.
The East African Crude Oil Pipeline (Eacop) company general manager, Martin Tiffen briefed Press on Sunday explaining that the pipeline would start in Tanzania because the distance is longer moving into Uganda.
Tiffen explained that there are only few pending items in the way of starting construction works, including government giving not to the Engineering, Procurement, and Construction (EPC) contracts, and signing of the Host Government Agreement (HGA) with the Tanzanian government “expected in the coming weeks.”
Sources close to this mega project have noted that the reason for starting construction in Tanzania is because land acquisition there is much easier because government owns the land.
In Uganda the airport is not yet ready meaning construction materials have to be brought by road.
The Tanzanian pipeline section from the border town of Mutukula to Chongoleani terminal in Tanga at the Indian Ocean is 1,443km.
The Ugandan section from Hoima through 10 districts of Hoima, Kikuube, Kakumiro, Kyankwanzi, Mubende, Gomba, Ssembabule, Lwengo, Kyotera to Mutukula in Rakai is 296km.
According details the construction phase is expected to generate 14,000 directs jobs, 45,000 indirect jobs by the contractors, and induced employment of another 105,000 people as a result of utilization of other services by the oil and gas sector: 57% of these are expected to be Ugandans and would yield at least U$48.5m payments annually.
The Tanzanian HGA was due for signing on Sunday but was delayed due to last-minute changes in Tanzania’s shareholding in the EACOP.
The new shareholding structure, as detailed in the Shareholders Agreement, which defines the rights and responsibilities of the shareholders in the pipeline company as signed on Sunday, is; Uganda through Unoc with 15%, Total Holdings International B.V. with 62%, Tanzania through its national oil company, TPDC, with 15%, and Cnooc with 8%.