After months of deliberation Kenya and Uganda have finally agreed on the route of a joint pipeline that will reach the Indian Ocean, reported Reuters. At stake is the development of the significant oil resources of both countries with an estimated 6.5 billion barrels of crude in Uganda and 1 billion barrels in Kenya.
Oil executives had warned before that they would not take any final investment decisions until the pipeline issue was resolved. The list of companies includes Britain’s Tullow Oil, France’s Total and China’s CNOOC.
According to Bloomberg the pipeline will run for about 1,500 kilometers (930 miles) from Uganda’s Hoima district through Lokichar and on to the Kenyan coastal town of Lamu and will cost $4.5b.
The choice of the route was not purely economic and technical, however, since a proposed northern route was problematic due to security considerations thanks to bandits and Islamists.
The governments also agreed on building a reverse-flow pipeline from Kenya’s port of Mombasa through Eldoret to Kampala. This will not transfer crude, but imported petroleum products instead.