Expedite crude pipeline project, Magufuli says

Magufuli and Museveni lay second foundation stone along pipeline corridor.

Uganda's President Yoweri Museveni (left) with his Tanzanian counterpart John Pombe Magufuli after commissioning the Mutukula one-stop border post on November 9, 2017. The also laid a second foundation stone for the crude pipeline in Ruzinga, Kyotera district in Uganda. PHOTO | PPU 

IN SUMMARY

  • The project is expected to cost $3.5 billion and is to be completed in three years.

Tanzanian President John Magufuli wants the joint crude oil pipeline project with Uganda expedited.

Dr Magufuli said it would be beneficial to the economies of the two countries if the construction of the 1,445-kilometre line is completed ahead of time.

“We need the project now because the early it is implemented, the early investors and the countries start generating money,” he said, adding: “Experts from the two countries should start talks with investors to see if oil can start flowing by 2019.”

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Dr Magufuli, who is in Uganda for a three-day State visit, together with his host President Yoweri Museveni laid the second foundation stone along the proposed pipeline corridor on Thursday in the southern Kyotera district about 50km from the Mutukula border.

Estimated to cost $3.55 billion, the line will transport Uganda’s crude from Kabaale, in the western Hoima district, to Chongoleani peninsula, near the Tanga port in Tanzania for export overseas.

According to the project report, the 24-inch diameter pipeline will move 216,000 barrels of oil per day at a cost of $12.2 per barrel.

The two head of States said they would ensure that the project is not held back by government bureaucracy.

However for Uganda land for public infrastructure remains one of the most controversial issues.

It will be financed jointly by the two governments through their respective national oil companies, Tanzania Petroleum Development Corporation and Uganda National Oil Company taking up about 30 per cent of the capital expenditure with international lenders expected to pool 70 per cent.

The first foundation stone was laid at Chongoleani in Tanzania.

Construction is expected to start at different points and complete in three years.

Earlier Thursday, the two leaders launched the second one-stop-border-post (OSBP) at Mutukula town on the Uganda -Tanzania border.

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