East Africa: Tanga Port � Best Route for Ugandan Crude Oil Exports

All eyes are on Kampala as the Ugandan government announces the route for the envisaged pipeline to export its crude oil; with chances indicating that the conduit will pass through Tanzania's Tanga Port.

Media reports from Kampala have indicated that powers that be have chosen the Tanzanian route due to a number of factors as flat terrain, with over 1,239 kilometres of flat or leveled and dry terrains, security and low cost compared to the Lamu Port through Kenya.

Other factors that kept Dar es Salaam on the competitive edge includes the fact that the country has vast expertise in implementing such huge projects and compensating people for land to create required leeway for the pipeline will not be a problem either.

What is more, contrary to arguments put forward by some ill-advised and so called environmental conservationists, the pipeline will not traverse any internationally protected area or national park save for just 33 kilometres through the Biharamulo game reserve.

Total E&P of French has already secured the US $4 billion (roughly 8trl/-) required for the mega project and showed willingness to dish-out the funds should the pipeline pass through Tanzania.

No wonder, based on these facts, Alon Mwesigwa, a journalist with the privately owned newspaper in Uganda, the Observer, had the courage to write last Monday that; "the oil pipeline route puzzle has been solved, with Uganda choosing to export her crude oil to the East African coast through Tanzania and not Kenya."

The writer continues to cite a draft report dated April 11, 2016, by Ugandan technocrats suggesting to authorities that the Tanzanian route was the viable one compared to the Lamu Port which has been touted by Kenya.

And again, writer David Mugabe of state-owned New Vision newspaper penned Tuesday that the announcement of the project will be made during the 13th Northern Corridor Integration Projects (NCIP), summit in Kampala which kicked off Tuesday with several technical and ministerial meetings.

"Running under the chairmanship of Ugandan President Yoweri Museveni, the major highlight of the conference is the impending announcement of the route the oil pipeline from Uganda will take with all indications pointing to the port of Tanga in Tanzania," he wrote.

The scribe went further and quoted the Minister for Energy and Minerals in Uganda, Ms Irene Mulomi, who confirmed last week that it would be crucial to announce the route at the summit because it is a critical infrastructure project for the region.

Heads of State from the six-member states making the East African Community (EAC), namely Tanzania, Uganda, Kenya, Rwanda, Burundi and South Sudan were expected to attend the summit.

Leaders from Democratic Republic of Congo and Ethiopia were as well scheduled to attend the summit which is one of the most significant regional steps so far at propping up the region's competitiveness through improving infrastructure. "The comprehensive analysis of the different options [routes], studies and due diligence results has been completed," said the technocrats in report.

"The Kabaale-Tanga route is the only option to secure first oil export by mid 2020, with pipeline availability of 99 per cent." The report says that on the Kabaale-Lamu route, the first oil export could only happen in mid-2022, with the pipeline availability at 80 per cent.

"The government of Uganda firmly concludes that Kabaale-Tanga (Tanzania) route is the low cost route for the transportation of crude oil from the region to the East African coast," reads part of the draft report as seen by the Observer.

The report was compiled by a team of technocrats in Uganda, led by Ernest Rubondo, the Commissioner for Petroleum Exploration and Production.

It is understood that Kenyan and Tanzanian officials presented their positions touting the advantages of their respective routes. Last October, Uganda and Tanzania signed an agreement to explore the possibility of building a crude oil pipeline between the two countries, setting the stage for fierce competition from Kenya, which thought it already agreed a deal with Kampala.

The competing options are the Kabaale-Lokichar-Lamu port (Kenyan) route, and the Kabaale-Tanga port (Tanzanian) route. Kenya is pushing for the once-preferred Lamu pipeline route, which goes through its oil-rich Turkana region. According to the report, the Lamu port still has a lot of problems and costs would be enormous for the parties involved.

First, the port is exposed to the south east waves over the banks, with the surrounding islands of Lamu, Manda, Mwamba, Chongoi and Pate unable to shelter it. On the other side, Pemba Island shelters Tanga bay from the South East monsoon, reducing the wave heights to less than 1 meter.

The wave heights reach 3.5 meters off Lamu during the monsoon season, the report says. Uganda has 6.5 billion barrels of oil, with between 1.2 and 1.7bn barrels recoverable. France's Total E&P favours the Tanzania route.

It argues that it is cost-effective and does not have the security threat that the northern Kenyan route poses. A meeting last month in Nairobi, attended by President Museveni and Kenya's Uhuru Kenyatta, and representatives of the oil firms Tullow and Total E&P, resolved to set up a group of technocrats to assess both routes and report in two weeks' time. Now the latest report puts everything to rest, recommending the Kabaale-Tanga port in Tanzania.

The experts report says the Tanga route is the least cost option for transporting crude oil to the East African coast; it presents the highest availability; presents the lowest environmental foot print and that it is the shortest schedule to deliver first oil export by mid-2020.

Source: Tanzania Daily News

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