Uganda: Agreement Signed With Tanzania For The Construction Of The Future Pipeline

The reserves in Lake Albert are estimated at 6.5 billion barrels of oil.

After months of discussions, a $3.55 billion framework agreement was signed on Friday (May 26th) in Kampala between Uganda and Tanzania. It lays the foundation for the construction of the pipeline that will allow Uganda to export its oil from the Albert Lake area to the port of Tanga. In total, reserves in Lake Albert are estimated at 6.5 billion barrels of oil. Those directly exploitable are estimated at 1.4 billion barrels.

" This is an important step for our country," said Ugandan Minister of Energy Irene Muloni. Uganda and Tanzania have agreed to cooperate with each other to facilitate the development, construction, and operation of the pipeline linking Hoima to the port of Tanga. A major step forward in this project, which plans to export Ugandan oil by 2020.

This agreement details the implementation timetables, the size of the pipeline and, above all, the taxes that will be imposed on oil crossing Tanzania, the point on which the agreements seem to be blocking so far. This right of passage will ultimately cost Uganda about $12 per barrel.

The 1,450-kilometer pipeline will, therefore, pass through Tanzania, which was officially announced in April 2016, rejecting a route to Kenya originally planned. The terms of the agreement are therefore formally laid down and the concrete phases of the project will begin.