New jobs in pipeline as construction starts

The line pipes, which will be used for the East African Crude Oil Pipeline (EACOP), are offloaded from a ship in Dar es Salaam, Tanzania. The Construction of the proposed East African Crude Oil Pipeline (EACOP) is taking shape in Uganda and Tanzania, with an estimated 10,000 jobs expected to be created. Photo | Courtesy 

What you need to know:

  • The EACOP Managing Director says they will focus on local communities while recruiting staff.

The Construction of the proposed East African Crude Oil Pipeline (EACOP) is taking shape in Uganda and Tanzania, with an estimated 10,000 jobs expected to be created as the pace increases to finish the 1,443km duct within the next 24 months.

Some 4,000 personnel are currently deployed on the project from Hoima to Tanga Port in Tanzania. The jobs cut across; electricians, bush clearers, flag-men, engineers, drivers, guards, planners, social advisors, mechanics, technicians, office attendants, doctors, among others.

The EACOP company Managing Director, Mr Martin Tiffen, told Daily Monitor in an interview that the 10,000-work force estimate is based on the various contractors’ manpower needs and plans.

“Typically for any large project, you mobilise skills, locally, nationally, and internationally, and EACOP is no different,” he said.

“So, we try our level best for unskilled work to take as much as possible from local communities.  And we have a big drive to do that. First of all, to stop people migrating towards the project site, but also so that the local communities get a direct opportunity from the project that is happening in their neighbourhoods.”

The construction sequence started with the coating plant at Nzega District in Tabora Region in Tanzania where shipments of line pipes hauled in from China and Greece will be piled for maintenance and thermal insulation. The coating plant located at the project’s mid-point was commissioned last Tuesday, the function officiated by Energy ministers of the two countries.

The bulk of line pipes are made by Panyu Chu Kong (PCK) Steel Pipe Co., Ltd in China, complemented by Greece’s Corinth.

In Uganda, grading and fencing works are ongoing at the four main camps and piping yards—75km apart—in Kakumiro, Mubende, Sembabule, and Kyotera—where the line pipes from the coating plant and other construction materials will be stored.

Early works have similarly commenced on the other 12 main camps and piping yards in Tanzania.

The Ugandan section of the pipeline is about 296km through 10 districts and 25 sub-counties, and 172 villages. 80 percent or 1,147km is in Tanzania snaking through 25 districts.

Each of the districts has been allocated an employment quota for both unskilled and skilled labour.

One skillset that is, however, in short supply in both countries and for which executives overseeing construction are contending with recruiting from outside East Africa, is oil pipeline welders.

“It’s not like welding metal in your garage. Typically you need two to three years’ experience of doing that. And the lifetime of the project is typically two to three years.  So it’s a bit of a chicken and egg thing,” Mr Tiffen revealed.

While Uganda has a considerable supply of welders, advanced knowledge of the craft and certification in the nascent oil industry has been a challenge over the last two years when construction of key infrastructure commenced. The Petroleum Authority of Uganda, that regulates the sector, acknowledges this gap.

In many instances, oil companies and their subcontractors have had to pick the tab for local welders to attain advanced training courses in 4G, 5G/5GR and 6G/6GR coded levels, respectively. The country has a steady supply of the lower rung levels—1G, 2G and 3G, respectively.

On the race track

The $10b (Shs38trillion) Uganda oil project encompasses the EACOP, Tilenga oil fields straddling Nwoya and Buliisa districts operated by French TotalEnergies EP, and Kingfisher development area south of Lake Albert operated by China’s CNOOC.

After several failed timelines, the government has set end of 2025 for starting commercial oil production through the $4b (Shs15trillion) pipeline. 

The timeline, which according to insiders was set to coincide with the next presidential election campaigns, some projections indicate could slip by several months into mid-2026.

Mr Martin Tiffen, however, underlined that the “target remains before the end of 2025.”

“There are always ups and downs but we’re always looking also at how we can improve our schedule. The pipe delivery started in December last year. So we’re timing from December last year (2023),” he said.

The pipeline is one of the two mediums, alongside the refinery, agreed between the government and the oil companies in February 2014 for commercialising Uganda’s 6.5 billion barrels of a stock tank of oil in place.

Years before, the Anglo-Irish wildcatter Tullow Oil promised to develop the refinery but reneged, sparking off a love-hate relationship with the government until the company closed shop in the country in 2021.

Years later, the deal to design, finance and build the 60,000 barrels per day (bpd) proposed refinery has hit snag twice. The United Arab Emirates’ Alpha MBM Investments LLC is currently taking a shot at it.

The EACOP will transport 216,000 barrels per day of oil to Tanga where it will be loaded into tankers en route to the international market.

The $4b EACOP capital expenditure is being pooled through a mix of debt, and equity by the pipeline company’s shareholders. Total Holdings International B.V a 62 percent stake, Uganda National Oil Company (UNOC) and Tanzania Petroleum Development Corporation (TPDC), each with 15 percent, and CNOOC with eight percent.

This, as TotalEnergies, CNOOC, and EACOP company executives in Paris, London, Beijing, and Kampala are working around the clock to close debt financing behind the curtains against the backdrop of the relentless #StopEACOP campaign that has been staged across capitals in Europe and North America.

“To some extent, EACOP has become a symbol for people opposed to oil and gas developments,” Mr Tiffen said, adding: “We do our best to communicate what it is we are doing and how we’re doing it, and we’re happy to be judged by that.”

The #StopEACOP campaigners forced especially American and European banks, which once displayed appetite for the project, to run for the hills.  Currently, three Chinese banks Sinosure, China Exim Bank and ICBC are said to be in the front seat of providing debt financing of $4b, which Mr Tiffen declined to delve into.

“I’m not able to say anything right now about financing, but please be assured that everything we have done is paid for. We don’t have contractors working for free, so we’re funding the project,” he said.

A catalogue of international and local companies hired to work on the buried heated pipeline continues to mobilise both in Uganda and Tanzania. Australia’s Worley’s has the Engineering, Procurement, Construction management and Commissioning (EPCmC) tender to coordinate the entire project works.

Italy’s ISOF Construzioni SRL is in charge of the coating plant in Nzega. The French Schneider/SNEF has the tender for electrical, instrumentation, telecoms, and security.

France’s Bolloré Logistics is hauling all the required construction materials from around the world to the Dar-es Salaam port en route to the interior, where it is assisted by a Uganda/Tanzania joint venture of Africa Global Logistics Uganda Ltd and East African Logistics Services Ltd.

China’s Daqing Oilfield Construction Group Co. Ltd is building the marine terminal and jetty at Tanga port where the oil tankers ferrying the crude oil will dock. China Petroleum Pipeline Engineering (CPP) is in charge of the pipeline construction, expected to commence intensive laying of the pipes later in the year after project financing has been closed.

Some of the local companies include New Plan and ICS in Uganda and in Tanzania where 80 percent of the project work falls, Milembe, Nyanza, JV SPEK, BBN Limited TZA.