Cabinet on Monday, January 16, 2023, approved the Application by the East African Crude Oil Pipeline Company Ltd for a license to construct the East African Crude Oil Pipeline (EACOP).
According to the State Minister for National Guidance and Information, Godfrey Kabbyanga, the license will come up with commitment from both the Governments of the Republics of Tanzania and Uganda to develop the EACOP project.
The EACOP, valued at $4bn (Shs13trillion), is a pipeline that will transport oil produced from Uganda’s Lake Albert oilfields to the port of Tanga in Tanzania where the oil will then be sold onwards to world markets.
The pipeline is buried and once topsoil and vegetation have been re-instated, people and animals will be able to cross freely anywhere along its length.
EACOP runs 1,443km from Kabaale, Hoima district in Uganda to the Chongoleani Peninsula near Tanga Port in Tanzania. About 80% of the pipeline is in Tanzania.
It is a buried thermally insulated 24″ pipeline along with six pumping stations (two in Uganda and four in Tanzania) ending at Tanga with a Terminal and Jetty. Here crude oil will be loaded onto tankers.
French TotalEnergies holds a 62 percent stake in the project while Uganda and Tanzania each hold 15 percent, and Chinese oil company, CNOOC, has eight percent.
EACOP allows Uganda to unlock value from its own natural resources and represents a significant inward investment of some $4 billion across both Uganda and Tanzania, thus value creation is also extended to Tanzania.
The new corridor linking the two countries will bring benefits including the development of new infrastructure, logistics, and technology transfer as well as improving the livelihoods of communities along the route.
The Tanzanian construction licence was also approved and is due for issuance in the coming days.
The application for the licence is a requirement under Midstream (pipeline, refinery) legislations including the Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act, 2013, and the Petroleum (Exploration, Development and Production) Act, 2013.