Tanzania plans to complete construction of a crude oil pipeline from Uganda in 2020 at an estimated cost of $3.5 billion, its energy ministry said on Monday.
Uganda said in April it would build a pipeline, to ship out crude from its fields in the Albertine rift basin, through Tanzania rather than Kenya, which had wanted to secure the export route.
Picking a route is vital for oil firms to make final investment decisions on developing reserves found in Uganda and Kenya, which are among a string of hydrocarbon finds on Africa’s eastern seaboard. Tanzania has found natural gas offshore.
“The pipeline will have a length of 1,443 kilometres… and is expected to be completed in 2020,” Tanzania’s ministry of energy and minerals said in a statement.
Tanzania said three oil firms operating in Uganda – London-listed Tullow Oil, France’s Total and China’s CNOOC – have all agreed to participate in the construction of the pipeline, with building work scheduled to start in June 2017.
Land-locked Uganda found crude oil reserves estimated by government geologists at 3.5 billion barrels in Hoima near the border with the Democratic Republic of the Congo (DRC) in 2006 but production has repeatedly been pushed back.
The jointly developed pipeline will carry Ugandan crude oil to Tanzania’s Indian Ocean port of Tanga for export.