We’re fast-tracking Oil Pipeline Bill, Nankabirwa tells private sector

Energy minister, Ruth Nankabirwa has reassured Ugandan and Tanzanian private sector players that government is working around the clock with Parliament to pass the East African Crude Oil Pipeline (EACOP) Bill that provides for enabling legal and working framework for the proposed export oil pipeline.

“My target is to make sure I get this key legislation passed by end of the month, which means I have less than two days,” she said Saturday at the opening of the Tanzania-Uganda Oil and Gas Symposium at the Julius Nyerere International Convention Center in Dar-es Salaam.  

The Bill which was approved by Cabinet in late-August is currently before the parliamentary committee on natural resources and specifically crystalizes provisions of the recent Inter-Government Agreement first signed in May 2017 between Uganda and Tanzania, and the Host Government Agreement signed off earlier in April between Uganda and the oil companies— French oil giant TotalEnergies East Africa Midstream B.V, and China’s Cnooc—for development of the pipeline.

The Bill also serves as a bridge with the existing midstream (pipeline, refinery) legislations including the Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act and the Petroleum (Exploration, Development and Production) Act, passed in 2013, and other related laws on land, tax, immigration, and insurance.

Once passed by parliament into law and assented to by the President, the bill is expected to kick-start the oil pipeline development and construction-related activities.

Tanzania enacted its equivalent of the EACOP in August to provide enabling legal frameworks for the project.

Both Uganda and Tanzania agreed to several concessions on tax, decommissioning, among others- to make the project least cost, which the EACOP Bill considers.

“These two legislations fulfil the major 4 requirements on the side of the two states for the development of the EACOP. We now eagerly await the full implementation of the project by the oil companies,” Ms Nankabirwa added.

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Physical works on the 1,445km duct running from mid-western Uganda in Hoima to Tanga Port and the Indian Ocean Port of Tanga have already commenced in Tanzania with establishment of a pipe coating plant, among others.

The capital expenditure for the project is estimated at $3.55b (shs13trillion), 70 percent of which will be raised from international lenders.

In Uganda, the EACOP holding company is currently working on fast-tracking land acquisition starting with financial literacy for the project-affected persons.  The Ugandan section of the pipeline is about 296km through 10 districts and 25 sub counties, and 172 villages, and affecting at least 4,00 persons.

Eighty [80] percent of the pipeline, 1,147km, will be on the Tanzanian side, and it is estimated that 80 percent of the $3.55bn project capex will be spent there.  Tanzanian section will pass through 25 districts; Missenyi, Bukoba Rural, Muleba and Biharamulo in the Kagera region: Chato, Geita, Mbogwe and Bukombe in Geita region: Kahama township authority in Shinyanga region: Nzega, Nzega town council and Igunga in Tabora region: Iramba, Mkalama, Singida rural in Singida region: Hanang, Kiteto in Manyara region: Kondoa, Chemba in Dodoma region: and Kilindi, Handeni township authority, Handeni rural, Korogwe, Muheza and Tanga city in Tanga region.

Mr Nankabirwa further revealed that physical works in Uganda have commenced in some of the upstream project areas (oil fields) with civil works on the Central Processing Facility of Tilenga in full gear as well as land acquisition for the EACOP. A CPF is where crude oil is rid of impurities like silt before being fed into the pipeline or refinery.

“Currently, the procurement and contracting process for the Drilling related services and the Engineering Procurement and Construction (EPC) for both Tilenga and Kingfisher are in the final stages and contracts have been approved for award by the government,” she added.

The Tanzania-Uganda Oil and Gas Symposium is co-convened by the Ugandan High Commission in Tanzania. President Museveni and her Tanzanian counterpart, Samia Suluhu are expected to attend the closing of the symposium tomorrow, Sunday.   

Uganda’s High Commissioner to Tanzania, Richard Kabonero said: "The symposium will offer overview to the private sector of both countries about current developments in the nascent petroleum sector."

Also attending are several Ugandan government ministers, and diplomats including Uganda’s Ambassador to South Sudan, Brig Ronnie Barya; Ambassador to Burundi, Major Gen (Rtd) Matayo Kyaligonza, Ambassador to DR Congo James Mbahimba, among others.