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Tanzania Ratifies East African Crude Oil Pipeline Project

September 12, 2017

On September 12, the Members of Parliament in Tanzania voted to approve the Intergovernmental Agreement (IGA) for the execution of the 1,445 kilometer East African Crude Oil Pipeline (EACOP) project.

The passage is a significant milestone in the eventual launch of the upcoming project connecting oil resources in Hoima, Uganda to Tanga, the most northerly seaport city in Tanzania. The pipeline will support delivery from a newly-discovered crude oil reserve in Uganda’s Albertine region to the East African coast. While some of the oil will be refined and resold locally, the vast majority of it will be exported outwards via the pipeline.

According to Information, Culture, Arts and Sports Minister, Dr. Harrison Mwakywembe, described the approval as allowing for the contract to provide “for the governments of Tanzania and Uganda to work closely with companies executing the project on national content for procurement of human resources, goods and services from the respective countries.” This reassurance may have been key in helping drive the strong support of the positive vote for the project in the legislatures.

The Minister also went on to reassure those concerned about other issues in the contract. He pointed out that companies involved in building the pipeline are also required to ensure transfer of technology to locals. This will help build up a long-term support infrastructure along with associated jobs in Tanzania, for the long term.

When the pipeline is complete, it will daily be transporting an estimated 216,000 barrels of crude oil from the oil source to the coast.

Copyright: North America Procurement Council Inc., PBC