By P. Sarojini
UGANDA (CWBN)_ In the sixth edition of East Africa Oil & Gas Summit 2020, Uganda’s Minister for Energy & Mineral Development Hon. Mary Goretti Kitutu officially declared that the Final Investment Decision for the East Africa Crude Oil Pipeline (EACOP) project will be signed in the first quarter of 2021 and the project will commence early next year.
Due to the Coronavirus pandemic, the sixth edition of East Africa Oil & Gas Summit 2020 was held virtually. During her address in the summit, Mary Goretti Kitutu said that 2020 had been a challenging year worldwide and that pandemic outbreak had negatively impacted the oil and gas industry to a greater extent.
The Minister further briefed on the EACOP project and highlighted the benefits of the project to both the countries. She said, “Since activities are beginning to take shape, I am optimistic that by the first quarter of 2021, the FID will be made. We are working hard to achieve it. The East African Crude Oil Pipeline represents an investment of more $3.5 billion US dollars with many commercial opportunities for both domestic and regional players. This is by far the biggest bilateral trade agreement between Uganda and Tanzania”.
The Minister spoke about the availing opportunities in the project. She said that the project will pave way for Ugandan companies to take part in the project and noted that the Ugandan government is taking necessary steps to ensure a fair share to the local companies in terms of participation in the project.
Mary Goretti Kitutu said that the government has allocated an additional $20 billion fund to support the Ugandan companies that are situated in the pipeline project areas. It was said that these funds will be granted to these companies.
The inception of EACOP project dates back to 2017, when Uganda and Tanzania governments signed an agreement to develop the East Africa Crude Oil and Pipeline in May 2017. They laid the foundation stone for the project in August 2017. However, the project faced legal and environmental issues that blocked its start over. In September 2020, Uganda and Tanzania signed a Host Government Agreement to further proceed with the project, which is set to commence early next year.
The development of EACOP project is a collaboration between the French oil company ‘Total’ (66.7%) and China National Offshore Oil Company ‘CNOOC’ (33.3%). In April 2020, for a total amount of nearly £444 million ($575 million), Total agreed to purchase Tullow’s 33.33% interest in the Ugandan oil assets as well as the oil export pipeline.
The EACOP pipeline is 1,443 km long and connects the oil fields of Lake Albert in Uganda with Tanzania’s export terminal in Tanga. Moreover, EACOP is the first of its kind pipeline project in East Africa and is also the longest electrically heated crude pipeline in the world. This project targets to supply up to 216 thousand barrels of crude oil per day from Uganda to Tanzania.
The pipeline will transport the crude output of the Kingfisher and Tilenga oil fields, which are being developed at the shores of Lake Albert by the Total and CNOOC companies. These two sources of oil fields are estimated to hold around six billion barrels of oil resources.
Edited by Elishya Perera
