Government of Uganda Approves License Application to Construct East Africa Crude Oil Pipeline

Friday, January 20th, 2023 | By

Cabinet of Uganda has approved the application by the East African Crude Oil Pipeline Company Limited for a license for the construction of the 296 km long East Africa Crude Oil Pipeline in Uganda.  

The State Minister of Information Communication Technology – ICT and National Guidance, Godfrey Baluku Kabyanga, and officials from the Ministry of Energy and Mineral Development communicated the development at a press conference at the Uganda Media Centre on Thursday.

Kabyanga said that Cabinet approved the application on Monday, indicating that the new corridor linking the two countries will bring benefits including the development of new infrastructure, logistics, and technology transfer as well as improving the livelihoods of communities along the route.

Eng. Herbert Magezi Mugizi, the Principle Engineer in the Ministry of Energy and Mineral Development – MEMD, said the approval of the applicable license now grants the East African Crude Oil Pipeline Company Limited legal access to start actual construction.

The East African Crude Oil Pipeline project will displace at least 118, 348 persons (56,460 in Uganda and 61,889 in Tanzania). However, challenges relating to land acquisition due to contestations of valuations by the project-affected persons – PAPs still remain eminent.  

Eng. Magezi disclosed that close to 68 percent of the PAPs have already been compensated while the pending compensations are expected to be concluded by the end of 2023.

The Ministry of Energy and Mineral Development says the engineering detail currently stands at 33 percent and major procurements have been awarded by the East African Crude Oil Pipeline Company Limited for the purchase of line pipes, high voltage, and marine cables, among others.

The approved pipeline construction project, that will consume about 2,740 acres of land, was awarded to a private company, the East African Crude Oil Pipeline Company Limited. The overall 1,443 km pipeline runs from Hoima district in western Uganda to the Port neighboring Tanzania.

The crude oil project which is worth 13.248 trillion Shillings (USD 3.6 million) traverses 171 villages across 10 districts of Kabaale, Hoima, Kikuube, Kakumiro, Kyankwanzi, Mubende, Ggomba, Ssembabuule, Lwengo, Rakai and Kyotera.

The East African Crude Oil Pipeline Company Limited has a shareholding of 62 percent from Total Energies while 15 percent will come from the host Government of Uganda through the National Oil Company.

Equally, the Government of the United Republic of Tanzania owns 15 percent shares through the Tanzania Petroleum Development Corporation – TPDC, and 8 percent shares for China National Offshore Oil Company – CNOOC Uganda Ltd.

Notably, on September 15, 2022, the European Parliament passed a controversial “emergency resolution” by a large majority denouncing the consequences of Uganda’s oil projects citing specifically Tilenga and the East African Crude Oil Pipeline.

The resolution called for the immediate suspension of drilling activities in the protected and sensitive ecosystem (Murchison Falls National Park) and the postponement of the EACOP project for at least one year to allow a feasibility study of an alternative path to preserve the environment. 
However, two months later on November 2, 2022, the “emergency resolution” was overturned during the Joint Parliamentary Assembly of the African, Caribbean, Pacific – European Union (ACP-EU) sitting in Maputo, Mozambique. The Assembly voted to let Uganda proceed with developing the Pipeline Project.