The holding company to fast track development of the proposed East African Crude Oil Pipeline (EACOP) is expected to come into force by September while construction is scheduled to kick off in the second half of 2022, according to an official media release.
The EACOP general manager, Mr Martin Tiffen recenctly stated that the company will take over all pipeline related operations from the French oil firm TotalEnergies EP, formerly Total E&P, operating the project since as soon as 2016 when Uganda settled for the southern pipes route through Tanzania via crude transportation to the international market.
“First and foremost, ‘up and running’ implies having the new company, with its management, staff, offices, IT systems, bank accounts, etc, everything that EACOP project needs in order to function. That’s one key part of the puzzle,” Mr Tiffen said.
In mid July, the East African Crude Oil Pipeline (EACOP) Project and Tanzania Petroleum Development Corporation (TPDC) launched the Priority Areas Compensation Agreements signing exercise in Sojo village, Nzega district, Tabora region. This is a landmark, being the first land acquired for the Project. It follows the signing of the Tanzania Host Government Agreement on 20th May 2021, which stipulates that Project required land will remain under Government ownership and be leased to the EACOP Project. The EACOP project will ensure that all households affected by the land acquisition process are compensated in line with both the Laws of Tanzania and the International Finance Corporation (IFC) Performance Standards. Each Compensation Agreement sets out the package of entitlements, both monetary and where appropriate in kind, including transitional support packages, replacement housing and access to livelihood restoration programs. Access to land will only take place after due payment of compensation and the notice to vacate served to the PAPs
The EACOP holding company owners as stencilled in Shareholders Agreement signed on April 11 at State House, Entebbe, are; Uganda National Oil Company (Unoc) with 15 per cent, Total Holdings International B.V. with 62 per cent, Tanzania through its national oil company, TPDC, with 15 per cent, and China’s Cnooc with 8 per cent.
The pipeline runs 1,443km from Hoima in mid-western Uganda to Chongleani terminal, at Tanga port at the Indian Ocean in Tanzania. The project cost is estimated at $3.55b (Shs13 trillion). In April, Uganda, Tanzania, TotalEnergies, and Cnooc, signed off the key project development agreements including the Shareholders Agreement, and Tariff and Transportation Agreement.
TotEnergies, Cnooc and Uganda also signed the Host Government Agreement (HGA), which lays basis for development of the pipeline, and later on May 12. Tanzania signed its version of HGA with the two oil companies.
Tilenga and Kingfisher wells be drilled and processed oil will be made to export quality while
Part of the production will be made available to the refinery project, and the rest of the daily production will be sent via EACOP to be sold into world markets.
The Eacop is a 1,445km long heated pipeline, a key component of the commercialisation of Uganda’s oil, which will transport crude oil from the Lake Albert oil production sites at Tilenga and Kingfisher projects in western Uganda to Tanga in Tanzania. Physically EACOP is 80 per cent in Tanzania in terms of length and 20 per cent in Uganda.
The Upstream and EACOP will be ready for first oil export in Q1 2025. That is three and a half years from now. The first thing to be done is to buy the line pipe that will be manufactured in various pipe mills around the world and it will take about six months before the first pipe is ready for shipment to Dar-es-Salaam to the coating plant. Coating is expected to be completed in the first half of 2022
A 300 kilometres of coated pipes are expected to kick off the project aa will be delivered to various piping yards then to the right of way in both Uganda and Tanzania.
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