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Museveni dumps Uhuru in Sh400 billion oil pipeline deal

Kenya’s hopes of sharing the Sh400 billion crude oil pipeline with Uganda could hit a dead end as the country’s neighbours firm up plans to construct one through Tanga, Tanzania.

A statement by Tanzania’s presidential press unit on Wednesday stated that President John Pombe Magufuli met his Ugandan counterpart Yoweri Museveni and agreed that the pipeline will pass through Tanga.

“The two agreed to begin construction of the crude oil pipeline from Tanga to Uganda, for the benefit of the two countries and their East African counterparts,” said Director of State House Communication in Tanzania Gerson Msigwa on Tuesday.

“The pipeline will have a length of 1,120 kilometres and the project will create employment to over 15,000 people.”

LAMU PORT

Kenya and Uganda had agreed to construct the crude oil pipeline through the Northern Lamu route mid last year. France’s Total, an investor in Uganda’s pipeline dismissed the option, quoting insecurity along the corridor.

Total has also been at the forefront advocating for the Tanga route.

A study by Toyota Tsusho shows that the Kenya–Uganda Northern route for the heated crude oil to Lamu Port is cheaper for both countries.

An MoU binding Tanzania with Uganda and initiating a study on the route was signed last year.

The countries have all been mute on the pipeline decision since December.

However, a senior official at the Ministry of Energy and Mineral Development in Uganda said Total chief executive Patrick Pouyanne visited President Museveni to convince him on taking the Tanga, Tanzania route in December.

“During the visit, Total insisted that it will produce Uganda’s oil despite falling crude oil prices, but through the port of Tanga,” said the official who could not be quoted because of the sensitivity of the matter.

Acting on Uganda’s stance on the pipeline, President Uhuru Kenyatta set up a special task force to explore ways of exporting oil by rail and tracks.

MISSION IMPOSSIBLE

The team has until September to see to it that oil production begins, a move that investors have termed impossible.

President Kenyatta is treating the rail and road transport plan to export oil as a short-term measure, awaiting the final solution that could see the crude oil pipeline construction begin.

Investors in Kenya and Uganda oil could, however, have the final say on the route.

China’s CNOOC, Britain’s Tullow Oil and France’s Total have invested in Uganda’s oil while Tullow is also working in Kenya.