Gas pipeline study to cost Uganda, Tanzania Shs5.6b

Uganda and Tanzania have issued calls for tenders for qualified engineering consulting companies to undertake a feasibility study on the proposed Liquefied Natural Gas (LNG) pipeline.

The two governments signed a feasibility study agreement for the project in November last year paving the way for the next phase. The study will cover, among others, technical aspects of the passageway, economic, social, and environmental risk assessments, and the gas market landscape in both countries.

The study will also inform the capital expenditure for the pipeline to transport gas from Tanzania’s LNG greenfield project with deposits estimated at 57.5 trillion cubic feet. A consortium of companies, including Pavilion Energy, Equinor, ExxonMobil and Ophir Energy were said to be in front to develop the project.

The feasibility study is estimated to cost $1.5m (Shs5.6b) subject to the outcomes of the bidding process.
Uganda’s High Commissioner to Tanzania Col (Rtd) Fred Mwesigye told Monitor that discussions are ongoing simultaneously to develop both gas and finished products pipelines between Uganda and Tanzania.

“All these are going to stimulate interactions between Uganda and Tanzania,” Ambassador Mwesigye told this newspaper on the sidelines of the ninth oil and gas conference at Serena last week.

Uganda and Tanzania are already developing the $4b (Shs15 trillion) East African Crude Oil Pipeline (EACOP) that will transport Uganda’s waxy crude oil from the oil fields in Hoima to Tanga port where it will be loaded onto containers en route to the international market.

Ambassador Mwesigye, who was named envoy to Tanzania in January 2023, replaced ambassador Richard Kabonero who was reassigned to the Ministry of Foreign Affairs in Kampala as director for Northern Corridor Integration Projects.

Uganda and Tanzania enjoy warm and cordial historical bilateral relations dating back to the 1960s.
Col Mwesigye was previously MP for Nyabushozi County. He told Daily Monitor that Uganda-Tanzania bilateral relations continue to flourish; see excerpts below; 

Your predecessor (Ambassador Kabonero) had built a base on which trade flourished. We also have several cross-border projects through the Joint Permanent Commission, but what has struck you so far?
In our line of work today, trade, commerce, and economic integration are more emphasised, and that foundation was laid by my past colleagues. And it has continued to grow from strength to strength, people to people doing business and government to government interactions, but also you have to appreciate policy shifts in our line of work; commercial and economic diplomacy is now more emphasised. And as High Commissioners, we are instructed on attracting investors and economic opportunities from the host countries where we are assigned.

What are some of the tangible things you have been able to superintend?
First and foremost, infrastructure in terms of road, air, and water transport in Uganda has helped stimulate economic activities. For instance, the trade in rice and the movement of goods on water have both improved.

Tanzania is constructing a Standard Gauge Railway line from the interior to Mwanza Port.  We also have the EACOP.

Staying on that, there was some growth in the romance between Uganda and Tanzania recently over importing fuel products via Dar-es-Salaam and after Kenya had sued Uganda over the UNOC-Vitol deal. Now that the court case is out of the way, where does it leave the proposed arrangement?

The discussions have progressed. It has not changed at all. The discussions on petroleum products and gas pipelines are ongoing simultaneously. But also we appreciate and shall continue using the Kenyan route, striking a balance of what goes where.  The Ministries of Energies of the two countries are guiding this process including the timelines.

The other big cross-border project is the EACOP, and last month the coating plant was commissioned in Nzega in the Tabora region, and we have also seen the arrival of line pipes from China. Is it something you are closely watching?
The project is both exciting and historical, and a practical example of strong bondage between Uganda and Tanzania. As the embassy, we constantly monitor activities, in discussions with the Tanzania Ports Authority and every other aspect, and report back home. There are no stumbling blocks, save for a few hurdles like murram roads in some areas.

You are also accredited to the Common Market for Eastern and Southern Africa (Comesa) which offers immense trade opportunities but has remained untapped? 

At the beginning of this month, I presented credentials to Comesa and I invited the Secretary-General to visit Uganda and invite President Museveni for the next Heads of State summit. She is coming in May so we start discussions, including boosting trade. What we are now concerned with and what I raised with the Secretary-General is connectivity.

Imagine there is drought in some of those countries in the south but how do we move our maize there because the roads are bad and there is no railway? We also need to remove the trade and non-trade barriers to allow us to trade freely.

Are there any sticking issues in trade with Tanzania?
Apart from what we read in the news, there is no big issue between Uganda and Tanzania that I know.

Are you seeing many Ugandans doing business in Tanzania?
There are many Ugandans in Tanzania and vice versa. What we need to push are joint venture partnerships as opposed to going at it alone.