Tanzanian president John Pombe Magufuli and president Yoweri Museveni on Sunday put pen to paper allowing for the construction of the $3.5bn (a 1,445 km) the east African crude oil pipeline. The project will connect Uganda’s oil fields to Tanzania’s port of Tanga.
Hassan Abassi, Tanzania government spokesman, said on Twitter that 80% of the pipeline will run through Tanzania.
Tanzania will earn 7.5 trillion shillings ($3.24 billion) and create more than 18,000 jobs over the next 25 years, or more, that the project is in place, Abassi said after the signing ceremony
Experts say Tanga port will experience more than $600 million direct investments in establishing new jetty, storage tanks, and supporting facilities. Uganda chose Tanzania port of Tanga over Kenya for its pipeline route in 2015
The project also is expected to improve the development of local capacity through technology transfer, boost infrastructure through the construction of new access roads and bridges and attract more investors in the budding sector.
September last year, mr. Magufuli Told mr. Museveni to Speed Up Pipeline Project “We are late. We are still sleepy,”
he added: “Actually we wanted the pipeline to be named Kaguta pipeline when it opens,” Magufuli said.
Uganda has not given a date for when construction of the pipeline will begin but said last year that once construction begins, it would take two to three years to complete.
A start date for construction has not yet been announced for what is set to become East Africa’s first major oil pipeline.
However, according to the joint communique issued after the ceremony , it was agreed that, “Each state party expeditiously concludes the Host Government Agreement with the East African Crude Oil Pipeline Project Company.”
Both leaders agreed that, “Each state party commences negotiations of all pending project agreements with immediate effect.”
Reports indicate Uganda and Tanzania agreed on a 40:60 profit sharing formula, a consensus realized on the basis of more than 70 per cent of the pipeline running through Tanzania’s territory.