Uganda has finally settled for the Southern route that goes through Tanzania for the proposed crude oil export pipeline.
The $4b project decision was announced by Ugandan President Yoweri Museveni this afternoon at the 13th Northern Corridor Infrastructure Summit held in Munyonyo.
The summit was also attended by Kenyan President Uhuru Kenyatta and Rwandan president Paul Kagame
Initially, Uganda, Kenya and Tanzania were torn between the northern route to Kenyan Lamu Archipelago on the Indian Ocean coast, and a route down south to Tanzania via Masaka to Bukoba and onto Tanga port also at the Indian Ocean coast.
However, in the wake of last month’s meeting between President Museveni and his Kenyan counterpart Uhuru Kenyatta, the Kenyan side added the “Mombasa route” on the table. The meeting hence tasked technocrats to harmonise findings contained in the various feasibility studies on the three routes and come up with one report.
The Japanese engineering firm Toyota Tsusho in 2014 conducted and submitted results of a feasibility study on the Lamu and Mombasa routes, but recommended the 1,300km (808 mile) Lamu route citing the need to tap into the economies of scale of LAPSETT corridor—a joint infrastructure project of South Sudan, Ethiopia and Kenya.
The 1,403-kilometre (876-miles) southern route is backed by French oil giant Total SA, one of the three oil firms licensed to operate in Uganda together with UK’s Tullow Oil PLC and China’s Cnooc. Total has also conducted a study on this route and says is willing to bankroll the project.
The technocrats from the three countries have also since completed inspection of the three ports.
Current discussions are looking at proven [resource] reserves which will have an impact on the pipeline, and the viability of each. For example, Uganda’s current stock tank oil in place stands at 6.5 billion barrels, which makes a pipeline viable.
In Kenya, Tullow recently completed exploration and appraisal phases in the South Lokichar—and 600 million barrels of oil have been discovered so far.
Tanzania on the other hand has no oil but has vast natural gas reserves estimated at 55 trillion cubic feet in the coastal Ruvu basin.
Other talking points include constructability issues along all routes, existing and planned infrastructure, terrain, and elevations.
Total, which is against the Northern route, has repeatedly cited insecurity concerns at Lamu [which borders the restive Somalia] and a challenging terrain; the swampy areas around Lake Kyoga, and the rocky hills in Karamoja and parts of north east Kenya, as the main reasons for its disapproval.
The oil will be transported by a heated and buried pipeline to maintain continuous flow, increasing the cost substantially, hence the need to avoid swampy areas. Crude discovered in both Uganda and Kenya is waxy with a pour point of more than 40 degrees centigrade.