Construction of a crude oil pipeline from Hoima district in Uganda to the Indian Ocean Tanzanian Port of Tanga has kicked off in earnest. The Hoima-Tanga crude oil pipeline has been in the offing in recent years.
And on Saturday, Ugandan President Yoweri Museveni and his Tanzania counterpart Joseph Pombe Magufuli have laid the foundation stone for the 1,445km-long East African crude oil pipe line.
The Hoima-Tanga crude oil pipeline , the longest of its kind in the world, will cost $3.5 billion and will be completed by 2020. The pipeline works will be undertaken by Total E&P, CNOOC and Tullow Oil, together with the two governments of Uganda and Tanzania.
The pipe line will on completion carry 216,000 barrels of crude oil for export daily.
More than 45,000 youth will benefit directly and indirectly with the implementation of the project, which upon completion is to completely change the outlook of port of Tanga.
Speaking at the event, Tanzanian president John Pombe Magufuli urged the youth to explore opportunities available in the project, which he said touches on almost every sector.
He praised Uganda for choosing Tanga route for the crude oil pipeline, which will also be a source of revenue for the two east African nations.
“It is high time Tanzanians chipped in and benefited from the regional project, which has countless benefits,” he said.
On his part Uganda president Museveni thanked President Magufuli for concessions on the Hoima-Tanga crude oil pipeline which include zero pay transit tax, Value Added Tax, corporate income tax and 20 years depreciation tax holiday.
Uganda will also be granted a free corridor where the pipeline passes while Tanzania promised to buy shares in the pipeline.
“I urge all East African member states to look at the East African crude oil pipe line as an East African community asset,” Museveni said.
He noted that with many discoveries of oil and gas deposits in many other countries in the region, the facility will be a vehicle for oil to the sea from all the East African countries.
According to feasibility studies, the Tanga route was deemed the cheapest for Uganda to transport its oil from the production point in Hoima to the international market.
Tanga route has convenient flat terrain, not interrupted by other activities, has lowest environmental challenges, and provides the shortest schedule for Uganda to see the first oil exports around mid-2020.
Uganda in April 2016 pulled out of the initial plan to jointly build the pipeline with Kenya from Hoima oilfields to proposed Lamu port via oil-rich Lokichar Basin at an estimated cost of $5 billion (about Sh516.55 billion).
Kenya decided to continue with plans to build a crude oil pipeline from oilfields in south Turkana to Lamu at an estimated cost of $2.1 billion (about Sh216.95 billion).