Uganda and Tanzania have awarded a contract for designing a crude oil pipeline running through both east African countries to US based firm Gulf Interstate Engineering, Reuters reported.
Tanzania’s Energy Minister, Sospeter Muhungo, expressed displeasure at the slow progress of plans to construct the pipeline. According to him, the Front-End Engineering Design (FEED) awarded to Interstate Engineering will take eight months to complete. Moreover, the project will run on debt financing, which is still under discussion pending getting on board a transaction adviser and completion of the feed, informed Daily Monitor.
The $3.55b, 1,445km pipeline will start in landlocked Uganda’s western region, where crude reserves were discovered in 2006, and terminate at Tanzania’s Indian Ocean seaport of Tanga. While, French oil major Total, has said it is willing to fund the project, it has not stated whether it wants to fully or partially own it.
Uganda estimates overall crude reserves at 6.5b barrels, while recoverable reserves are seen at between 1.4b and 1.7b barrels. Production expected to start in 2020.