An intergovernmental ministerial committee meeting between the governments of Uganda and Tanzania agreed to sign the Host Government Agreement (HGA) for the East Africa crude oil pipeline by the end of June 2019.
Uganda Energy minister Irene Muloni and her Tanzanian counterpart Medard Kalemani have said the two governments and oil companies have committed to conclude discussions and sign the contentious HGA as well as reaching Final Investment Decision (FID) for the crude oil export pipeline by June.
Ms Muloni said that “once we receive the blessing from the presidents we will have few meetings remaining with the oil companies to finalize the other agreements, and then sign by June.”
Dr Kalemani said the two countries have generally agreed on everything pending consultations with presidents, Tanzania’s John Magufuli and Mr Museveni.
“Our duty is to ensure that all intended agreements are finalised and signed by June this year,” he said, adding: “Generally, the entire project (pipeline) is of mutual interest to us (Uganda and Tanzania) but there are issues that are critical to each party,” he said.
The HGA will include Uganda, Tanzania, and joint venture partners, Cnooc, Total E & P, and Tullow Oil – and is a precursor to other key agreements. negotiated with joint venture partners before reaching a final investment by the end of the year. The meeting did not address issues of revenue sharing, taxation or local content policy for jobs created by the pipeline.
The 1400m pipeline is projected to take 36,000 to 10,000,000 direct and indirect jobs that are expected to be created. The pipeline will extend from Hoima, Uganda to the Port of Tanga, Tanzania on the Indian Ocean.
With an overall projected cost of $ 3.5 billion, only 20 percent of the pipeline’s total length will be in Uganda, and this portion is expected to cost $ 700 million. Uganda and Tanzania are expected to fund between 30 to 45 per cent of capital expense through their respective national oil companies, Uganda National Oil Company and Tanzania Petroleum Development Corporation.
