Uganda and Tanzania have inked an agreement to conduct a feasibility study for a gas pipeline connecting Tanzania’s expansive yet secluded deepwater gas fields to Kampala, as stated by the energy ministers of the two countries.
Tanzania is currently awaiting cabinet approval for a $42 billion liquefied natural gas (LNG) project aimed at tapping into its substantial 57.5 trillion cubic feet of natural gas reserves.
In May, Tanzania’s energy ministry reached an agreement with Equinor (EQNR.OL), Shell (SHEL.L), and Exxon Mobil (XOM.N) for the development of an LNG export terminal, marking a significant step forward after years of delays, Reuters reported.
“Time is running, we are behind time, let us make it happen,” Tanzania’s deputy prime minister and energy minister Doto Biteko said during a signing ceremony in the capital city Dodoma late on Thursday.
Ugandan Energy Minister Ruth Nankabirwa has appealed to financing institutions, urging them to provide affordable credit to support the funding of the project.
In collaboration with France’s TotalEnergies and China’s CNOOC, Uganda and Tanzania are jointly working on a 1,445-kilometre-long pipeline to facilitate the transportation of crude oil from Uganda’s oilfields to global markets through a port on Tanzania’s Indian Ocean coast.
President Yoweri Museveni of Uganda expressed the country’s interest in utilizing the same pipeline corridor to transport affordable natural gas from Tanzania.
“This gas will not be affordable if we use expensive money,” Nankabirwa said, without giving a timeline for the construction.
Business Insider Africa earlier reported that Uganda replaced Kenya with Tanzania for its oil imports. This move might lead to Kenya forfeiting $100 million in annual earnings from managing Uganda’s petroleum and related products.
