Uganda, Tanzania come closer to constructing East African pipeline
29-01-2019 06:35:00 | by: Pie Kamau | hits: 4749 | Tags:

An intergovernmental ministerial committee meeting between the governments of Uganda and Tanzania agreed to sign the Host Government Agreement (HGA) for the East Africa crude oil pipeline by the end of June.

The HGA will include Uganda, Tanzania, and joint venture partners, Cnooc, Total E & P, and Tullow Oil - and is a precursor to other key agreements. negotiated with joint venture partners before reaching a final investment by the end of the year. The meeting did not address issues of revenue sharing, taxation or local content policy for jobs created by the pipeline.

The 1400m pipeline is projected to take 36,000 to 10,000,000 direct and indirect jobs that are expected to be created. The pipeline will extend from Hoima, Uganda to the Port of Tanga, Tanzania on the Indian Ocean.

With an overall projected cost of $ 3.5 billion, only 20 percent of the pipeline's total length will be in Uganda, and this portion is expected to cost $ 700 million. Uganda and Tanzania are expected to fund between 30 to 45 per cent of capital expense through their respective national oil companies, Uganda National Oil Company and Tanzania Petroleum Development Corporation.

Remaining renewed negotiations, both countries have consented to sign the agreement with the pipeline.