Uganda, Tanzania sign deal for construction of crude oil pipeline project

SOCHI, RUSSIA - OCTOBER 23, 2019: Uganda's President Yoweri Kaguta Museveni . Mikhail Metzel/TASS Host Photo Agency (Photo by Mikhail MetzelTASS via Getty Images)
FILE PHOTO: Uganda’s President Yoweri Museveni. (Photo by SUMY SADURNI / AFP/ Getty Images)

East African nations Uganda and Tanzania signed the Host Government Agreement (HGA) for the construction of the East Africa Crude Oil Pipeline (EACOP) project.

The signing of the agreement took place on Sunday in Chato in the northwest of Tanzania in a ceremony attended by Ugandan President Yoweri Museveni and his Tanzanian counterpart John Magufuli.

The pipeline will run from Uganda’s oilfields to the port of Tanga in Tanzania’s northeast. According to Tanzania’s government spokesman, Hassan Abassi, more than three-quarters (80 percent) of the pipeline will run through Tanzania.

Though Uganda has not yet formally announced a date for when the construction will begin, it had previously said that the project will take two-and-a-half to three years to complete.

Abassi said that Tanzania will earn an estimated $3.24 billion and create more than 18,000 jobs over the next 25 years, or more, that the project will be in operation.

Museveni already oversaw the signing of the HGA for the EACOP project between the government and French oil and gas multinational company Total. The HGA is a legal agreement between a foreign investor and the local government relating to the development, construction and operation of a project by the investor.

Museveni the conclusion of that deal with Total “moves us closer to production of crude oil in Uganda.”

London-based Tullow Oil expressed confidence that it will finalise the sale of its stake in Uganda’s oilfields to Total later this year.678