Tanzania still ahead in Uganda pipeline deal

12Apr 2016
The Guardian Reporter
The Guardian
Tanzania still ahead in Uganda pipeline deal
  • • As Kenyans refuse to sign joint document

The government has continued to make headway in its efforts to convince Uganda to pass a potentially lucrative crude oil pipeline through Tanzania instead of Kenya following a fresh endorsement by a team of Ugandan experts.

Prof. Justin Ntalikwa

According to a statement released yesterday by the Ministry of Energy and Minerals, the endorsement was made at a meeting in the Ugandan capital Kampala last Saturday attended by representatives from all three countries – including Kenya which is apparently still lobbying hard to win the project.

The statement said the Tanzanian delegation to the meeting made a compelling case as to why the proposed 1,400-kilometre pipeline from Hoima in Uganda should pass through Tanzania to the port of Tanga on the Indian Ocean coast.

The delegation included the ministry’s permanent secretary, Prof. Justin Ntalikwa, deputy PS Juliana Pallangyo, and experts from the Tanzania Petroleum Development Corporation (TPDC) and Tanzania Ports Authority (TPA).

They argued that Tanzania has had much more success in launching and consolidating such projects, citing the 1,710km Tanzania Zambia Mafuta Pipeline (Tazama), SongoSongo—Dar es Salaam, Mnazi Bay—Mtwara and Mtwara-Dar es Salaam gas pipelines as confirmed success stories.

The Kenyan delegation to the meeting had nothing to offer that could match that experience, the statement said.

The Ugandan representatives to the meeting were further convinced when Tanzanian experts explained the country’s land policy that allows the state to acquire land and compensate citizens without much ado, unlike in Kenya where land - apart from being scarce - is held by private individuals and state acquisition can be a daunting task.

“At the end of the meeting, the Kenyan participants reportedly refused to sign the (meeting) minutes in protest against the Ugandans’ apparent preference of the Tanzanian route rather than that offered by Kenya,” the statement read.

Tanzania is selling the operational Tanga port as the best route to pump Uganda’s reportedly rich reserves of crude oil which is expected to start flowing to international markets in 2018, while Kenya is campaigning for its yet-to-be-built Lamu port.

The tug-of-war for the project between the two neighbouring countries appears to have been intensified by a disagreement of sorts over which route is better among the three international oil firms involved – Total of France, Britain’s Tullow Oil, and China’s CNOOC.

Total have already committed funds for the $4 million-plus project and, according to the company’s Uganda branch general manager Adewate Fayemi, they consider the Tanga route as being the more cost-effective of the two after evaluating all the options.

"As a company, our position remains that we are going through the Tanga route…I understand there are issues being discussed but our position remains the same," Fayemi told an East African Oil and Gas conference in Dar es Salaam recently.

Tanzanian authorities have also been steadfast in maintaining that the agreement between President Magufuli and his Ugandan counterpart Yoweri Museveni over the project in early March was conclusive despite Kenya’s continued jostling.