Blow to Kenya as Uganda, Tanzania seal pipeline deal!
• The Ugandan President termed the signing of the oil pipeline project as “the third victory for Uganda and Tanzania.”
• The pipeline would have cut through northern Kenya and the Lokichar Basin from Hoima in western Uganda before reaching the port city of Lamu.
Kenya’s plans to jointly set up an oil pipeline with Uganda are dead after the land-locked country teamed up with Tanzania.
The deal was signed during the maiden weekend visit of Tanzanian President Samia Suluhu to Uganda, throwing into jeopardy the 1500 kilometre pipeline project between Kenya, Uganda and South Sudan.
The three countries in 2014 agreed to set up the Uganda–Kenya Crude Oil Pipeline (UKCOP) with South Sudan joining the project at its Unity State as an alternative to its only current oil export route through Port Sudan.
Uganda opted out a year later to join the Tanzanian project saying it was cheaper to connect the oil pipeline from Lake Albert to Tanzania’s Tanga Port , than Kenya’s route to Lamu Port.
According to Kampala, the Kenyan route would have delayed the project as it lacks existing roads coupled with the fact that it is always affected by monsoon winds for up to three months annually.
The Lamu Port–South Sudan–Ethiopia Transport (LAPSSET) backed route would have covered approximately 850 kilometres inside Kenya, with most of the route underground.
The pipeline would have cut through northern Kenya and the Lokichar Basin from Hoima in western Uganda before reaching the port city of Lamu.
In November 2014, Kenya and Uganda jointly selected Toyota Tsusho Toyota as a consultant for the pipeline, with a contractor expected to be selected in January the following year.
This, however, was put to a halt after Uganda and Tanzania started talks on a new pipeline route in a deal cemented in a meeting between President John Magufuli and Yoweri Museveni.
The 1,400km pipeline will connect Uganda’s western region, near Hoima – where big oil reserves have been discovered – with Tanzania’s port of Tanga.
Yesterday, Reuters reported that French oil firm Total and partner China National Offshore Oil Corporation have concluded talks on the launch of the Lake Albert resource development project in the two countries and plans to construct a $3.5 billion East African Crude Oil Pipeline (EACOP).
This was shortly after Suluhu met Museveni on her first-ever international trip after succeeding Magufuli, who died in March.
The Ugandan President termed the signing of the oil pipeline project as “the third victory for Uganda and Tanzania.”
This now means that Kenya will go it alone on the much delayed Lokichar-Lamu Crude Oil Pipeline project.
Last month, the National Environmental Management Authority (NEMA) called for public participation in the project.
According to original plans by Toyota Tsusho, the pipeline was to originate in South Lokichar Basin, in Turkana County and end at Port Lamu on the Indian Ocean, traversing Samburu, Isiolo, Meru, Garissa and Lamu counties.
The construction, which was to begin in 2019, was set for completion in June 2022 but was hit by a myriad of delays over permits and land disputes.
Although British oil firm Tullow Oil signed an agreement with the Kenyan government to construct the pipeline in 2018 and Wood Group commenced a survey of the pipeline route in July 2019, the Kenya Defense Force (KDF) blocked the project and demanded an overhaul of the pipeline, saying it was encroaching on its land.
Wood Group had presented Tullow and Total with two different options for the pipeline: one with onshore storage facilities at a cost of $1.2 billion, or a pipeline with floating storage facilities at a cost of $1.1 billion.
The pipeline was to be 18 inches long and would have covered a distance of 824 kilometres at a capacity of 65,000 barrels per day, expandable to 80,000.
Even though public participation in the pipeline is ongoing, uncertainties about the Turkana oil project might undermine the pipeline dream.
Last year, Africa Oil and its joint venture partner Tullow Oil secured licence extensions from Kenya to continue exploration and production activities in South Lokichar until 2021.
This came after Tullow Oil undertook a six-month review of the viability of its operations in Kenya after a planned sale of its stake in the project fell through.
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