THE announcement that Uganda has taken a final to route a multibillion-dollar crude-export pipeline through Tanzania, on Saturday, is not as straight forward as it sounded.
A 1,410 kilometres (876 miles) pipeline will run from the western Uganda region of Hoima to the Tanzanian port of Tanga, Uganda Foreign Affairs Minister Sam Kutesa said after a summit of the East African Community bloc - which groups Uganda, Kenya, Tanzania, Rwanda and Burundi - in the nation’s capital, Kampala. Kenya will build a link between the towns of Lokichar and Lamu, both in Kenya, he said.
Tanzania has been competing with neighbouring Kenya for the cross-border pipeline, which will tap Ugandan oil deposits being developed by France’s Total SA, China National Offshore Oil Corp. and London-based Tullow Oil Plc. Total said in December it would prefer to transport crude via Tanzania, while Tullow has favoured the Kenyan route.
“While we have always believed that a joint Uganda-Kenya export pipeline was the most cost-effective option, we are clear that both Uganda and Kenya’s oil resources can be developed separately,” George Cazenove, a spokesman for Tullow, said on Saturday in an e-mail to Bloomberg. The company will work with Uganda, Kenya and its partners to advance projects in both countries, he said.
‘I have agreed’
It’s interesting that both Kutesa and Uganda spoke about the Kenyan pipeline. “I have agreed with President Uhuru Kenyatta that let the two pipelines go ahead,” Museveni said.
On the face of it, it looks both strange, but also meaningless, why Museveni and Kenyatta would agree on a pipeline that will be built entirely and independently inside Kenya. But it speaks to what is emerging as a pipeline arms in East Africa, with Museveni becoming a kind of happy oil polygamist.
Quoting a Ugandan proverb to explain his philosopy on the Tanzania and Kenya pipelines, Museveni said : “if puppies are young, you don’t know which one will be a better hunter, so you feed all of them and when they grow you see which one emerges the best hunter,” Museveni said that for now, the two projects should be allowed to go ahead.
He is hedging by keeping the Kenyan option active in case the Hoima-Tanga hits trouble. It is likely Museveni and Kenyatta have an informal agreement that Uganda would do a loop through Kenya if Kenya’s pipeline is ready first.
The first large discoveries of oil in Uganda date back to 2006 on the shores of Lake Albert. Reserves in the area are conservatively estimated at some 1.7 billion barrels. But informed sources say production will not come on stream before 2025.
It is not yet clear how the sequencing of production and oil pipeline will be done. The 1,070-kilometre (660 miles) Chad–Cameroon pipeline, was launched on October 18, 2000 and completed in June 2003. If the Uganda-Tanzania pipeline construction pace follows that pace, then at least four years will have to be added or subtracted from the 2025 production schedule.
In Uganda’s case, internal jostling over oil licencing, infrastructure deficits, and the recent slump in crude prices, have delayed commercialisation.
Museveni, 72, in February won a controversial violence-blighted sixth term in office (two of them unelected), and he and his inner circle are deeply vested in marketisation of oil.
As he ages, and enters what inevitably are his last years in office, the control of oil has become a critical element in the Museveni succession – and pension – so the two pipelines option ensures that petrodollars will be pocketed sooner if Uganda creates a pipeline race between Tanzania and Kenya, and also doesn’t put all its eggs in the Tanzania basket.
Analysts in Kampala also believe that Museveni’s grand retirement plan is to become the first titular president of the East African political federation, a project he has championed vigorously. His voters for the job are the East African leaders, so it is good politics on his part not to upset either Kenya or Tanzania on the lucrative pipeline deal.
The Hoima-Tanga pipeline would the longest in East Africa, a region which, along with southern Africa, is the most pipeline poor in Africa. North Africa is the richest in pipelines, followed by West Africa.
It would also be the longest heated oil pipeline in the world; Uganda’s crude oil is waxy in nature, which means the pipeline will have to be heated for the oil to flow. Getting the product to sea will also require multiple pump stations to overcome the hills and valleys of the Great Rift Valley that cuts through the region.
The longest pipeline in Africa is the Tazama pipeline from Dar es Salaam in Tanzania to Ndola in Zambia, which runs for 1,710 km. But there is an ambitious gas pipeline that has been on the drawing books for decades now, a 4,200 km Trans-Saharan pipeline from the gas fields of the Niger Delta in Nigeria, northwards through the Sahara desert and into Algeria, where it would join Algeria’s already dense pipeline network into Europe.
A feasibility study on the Trans-Saharan pipeline was completed in September 2006, and it found the pipeline to be technically and economically feasible and reliable. But the project has struggled to find financing.