KAMPALA: Uganda is considering its options on building an oil pipeline passing through Kenya after raising several concerns mainly on security as regards the oil pipeline.
Uganda’s Ministry of Energy and Mineral Development says it is evaluating the routes with the idea that the least-cost route would be picked. Uganda has also signed a new MOU with Tanzania that aims at exploring the possibility of building a crude oil pipeline between the two countries.
Although Uganda said in August it had agreed to the Kenyan route, it said Kenya had to guarantee security for the pipeline, along with offering cheaper financing than the alternative countries.
In a statement, Uganda’s Ministry of Energy and Mineral Development says that it was evaluating the routes with the idea that the least-cost route would be picked. This according to the statement creates a working framework for the potential development of a crude export pipeline from Hoima to Tanga Port of Tanzania.
Landlocked Uganda is keen to get a pipeline to the East African coast to ship its crude reserves, estimated at 6.5 billion barrels, at the least possible cost. The Kenyan route has raised some industry concerns because it would run in the north eastern region where security concerns have been raised as well as near the border with Somalia from where the Alshabaab has previously launched attacks on Kenya.
A final decision on the pipeline route is seen as crucial in helping Total, UK-based Tullow Oil and China’s CNOOC, explorers in Uganda’s petroleum industry, to decide on oilfield development plans.
Settling for a route through Tanzania could slow some projects in Kenya, which are planned to run alongside the pipeline on the Northern Lamu corridor, where Kenya plans to build a new port to serve the region.
Uganda has said it plans to start crude oil production at least by 2018, although most industry analysts expect full-scale commercial production to take off in 2020, when a domestic refinery and an export pipeline are in place.
