East African pipeline signing: Ugandan oil heading to market

East African pipeline signing: Ugandan oil heading to market

Last weekend, the presidents of Uganda and Tanzania announced they would build an oil pipeline to transport Ugandan crude to

Photo: Bloomberg

Photo: Bloomberg

Last weekend, the presidents of Uganda and Tanzania announced they would build an oil pipeline to transport Ugandan crude to the Indian Ocean. The pipeline will come one step closer to reality on Saturday when the country’s energy ministers sign a treaty formalising the project.

While the pipeline was originally slated to pass through Kenya, high costs and security concerns—particularly over the threat posed by al-Shabaab and its affiliates—prompted a rethink. In the end, Ugandan leaders decided on the Tanzania-option; the pipeline will run 1400 kilometres southeast from the Hoima oil fields to the port of Tanga.

After emerging from decades of political instability—initially under dictator Idi Amin and later driven by disputes with neighbours—Uganda has enjoyed a substantial uptick in economic activity since the 1990s. The Hoima-Tanga pipeline is a crucial part of the country’s future economic development and, once completed in 2021, it’s expected to transport some 200,000 barrels of crude per day to global markets.

Construction on refineries and other support infrastructure are also expected to begin in the coming months, with the combined projects expected to provide an estimated 150,000 jobs in the coming years.