East Africa’s race to export its first oil will eventually be a tie between neighbors Kenya and Uganda because both need to share a pipeline rather than compete for different routes, a producer in the region said.
“The only sensible route for the pipeline is a joint pipeline” running through both countries, Africa Oil Corp. Chief Executive Officer Keith Hill said by phone from Calgary to Bloomberg.
While crude was discovered in Uganda in 2006 and four years later in Kenya, both are still in the planning stage of commercial development. One option is to send the oil through the Lokichar basin in northern Kenya. Another is to run a line via southern Kenya and the capital, Nairobi. A third is to pipe the oil through Tanzania.
Uganda, which last month signed a memorandum of understanding with Tanzania and oil producer Total SA to study a possible pipeline through the coastal nation, has repeatedly said the eventual shipment route must be the cheapest to develop. Kenya has estimated the cost of the proposed northern line at about $3.9 billion.
