Uganda oil pipeline: Tanzania invites private sector in refinery

ARUSHA, Tanzania – Tanzania has invited the private sector to inject funds in the Uganda oil refinery, in which Tanzania has been allocated eight percent.

Prof. Sospeter Muhongo, Tanzanian Minerals and Energy minister said Tanzania has been allocated eight per cent shares that would cost $150.4 million.

The minister, in a statement published on the ministry’s website, said it would be appropriate for the private sector to come in a Public Private Partnership (PPP) arrangement to be able to meet Tanzania’s allocated funding share.

The Ugandan government has allocated 40 per cent shares to East African Community states including Tanzania. Prof Muhongo visited the proposed site for the refinery early this month during talks on the oil pipeline.

The Ugandan government is looking for a lead private investor for the refinery after the Russian RT Global Resources withdrew from the project. Negotiations with the SK Engineering of South Korea to replace the Russians are ongoing.

Meanwhile, two other major investors in oil exploration in Uganda, Tullow and CNOOC, have agreed to be part of the oil pipeline from the Kabaale to Tanga port. Prof Muhongo said in a statement issued by the ministry that the two investors, who had previously shown interest in participating in the oil pipeline that was to pass through Kenya, have now shown interest to join in on the construction of the one to passing through Tanzania.

The construction is expected to start on January 2017 will be named the East African Crude Oil Pipeline (EACOP).

“The pipeline will cost $3.55 billion and will be 1,443 kilometers long capable of carrying 200,000 oil drums per day,” Prof Muhongo noted. Adding that Tullow and CNOOC, participated in the talks that commenced in Kampala Uganda on July 4th.

Tanzanian officials who participated in the talks came from the Ministry of Energy and Minerals, Tanzania Petroleum Development Corporation (TPDC) and the Tanzania Ports Authority (TPA).