In 2006, commercial quantities of oil were confirmed to exist in the Lake Albert basin, West of Uganda.
The International oil companies in Uganda; China National Offshore Oil Company (CNOOC) LTD, Total and Tullow Oil Plc completed the exploration phase and are now headed into development, which will consequently lead to the production of Uganda’s oil resources.
Once Produced, the crude will be partly refined in Uganda (according to current existing plans) to supply the local market. The export to the international market will be through an export pipeline; The East African Crude Oil Export Pipeline (EACOP).
This infrastructure shall be development and operated as a private sector project on a single integrated basis by a special purpose company (Pipe Co) in which the lake Albert Upstream partners (CNOOC, Total, Tullow and the Uganda National Oil Company (UNOC) and the Tanzania Petroleum Development Corporation (TPDC) will be shareholders.
1. What is the East African Crude Oil Pipeline (EACOP)?
The East African Crude Oil Pipeline is a 1,443km crude oil export infrastructure that will transport Uganda’s crude oil from Kabaale-Hoima district in Western Uganda to the Changoleani peninsula near Tanzania’s Northeastern port of Tanga for export to the international market.
This major export system, (296km in Uganda and 1,147km in Tanzania) comprises of a 24″ insulated buried pipeline, six pumping stations, two pressure reduction stations and a marine export terminal.
2. Why will the East African Crude Oil Pipeline be electrically heated?
The viscous and waxy nature of Uganda’s crude Oil requires shipping at a maximum temperature of 50°C to have an optimal viscosity for it to flow. To maintain this operating temperature, the pipeline will be electrically heated along the entire route. The EACOP will be the longest heated pipeline in the whole world.
3. Why isn’t a railway or road being used to transport the crude oil instead of the pipeline?
Transport of crude oil by pipeline is safer, more reliable and more environmentally friendly than rail or road alternatives.
Transporting the crude by road or rail is significantly more expensive and riskier than by pipeline and can be viable for small volumes of oil over shorter distances, especially if the rail and road infrastructures are already in place.
Transporting Uganda’s crude oil by road for example would require over more than 2000 heated trucks daily on roads which would generate road safety risks, as well as environment and social issues.
4. Will the Oil transported through East African Crude Oil Pipeline be usable?
No, the oil to be transported through this conduit is in its crude form at room temperature with a high Waxy Appearance Temperature (WAT) thereby making it unusable for domestic or other uses.
5. Where will the East African Crude Oil Pipeline be located?
The pipeline will cross two countries, Uganda and Tanzania. In Uganda, it will cover a distance of 296 kilometers, through nine (9) districts including; Hoima, Kakumiro, Kyankwanzi, Mubende, Gomba, Sembabule, Lwengo, Kyotera, Rakai.
In Tanzania, EACOP will cover a distance of 1,147 km traversing eight (8) regions including; Kagera, Geita, Shinyanga, Tabora, Singida, Dodoma, Manyara and Tanga. It will go through 25 districts.
See map. For clarity, download the map here
6. Why was this particular route chosen?
Following extensive studies of different route options, The Government of Uganda selected the Kabaale (Hoima)-Tanga route on the basis of being the least cost, most technically robust and most viable to deliver Uganda’s Oil.
7. Will the East African Crude Oil Pipeline be visible?
No, the pipeline will not be visible. It will be buried to a depth of up to two (2) meters. It will also be buried deeper in areas where it has to cross river or roads.
The only element of the pipeline that will be visible will be the pumping stations, the electrical heat tracing stations, the main block value stations, the marine storage and offloading facilities.
8. How will the East African Crude Oil Pipeline corridor be identified then?
The EACOP corridor will be marked to indicate its presence, approximate location, product carried and name and contact information of the company that operates it.
The restriction on activities with in 10 meter operation Right Of Way (ROW) are currently under discussion and will be agreed with the relevant government representatives in Uganda and Tanzania
Many activities such as planting of deep-rooted trees or construction of structures will not be allowed within 10 meter pipeline corridor during the operation of the pipeline.
Crossing the corridor after construction will be allowed by pedestrians and livestock except at specific locations. Vehicle access will be allowed at existing roads.
No access will be allowed into the permanent Above Ground Installation (AGIs) sites.
9. Who is going to build the East African Crude Oil Pipeline?
The pipeline, the Above Ground Installations and the Marine Storage Terminal will be constructed by specialized construction contractors according to the detailed design done by the Engineering Procurement and Construction Management (EPCm) contractor.
Those contractors will be selected through a tender process and EACOP construction will be managed by Pipe Co. Project Management Team with the support of the EPCm contractors.
10. Which phase is The East Africa Crude Oil Pipeline Project at?
In May 2017, Uganda and Tanzanian officials inked the Inter-Government Agreement for EACOP laying a foundations for the project as well as other project agreements, including the Host Government Agreements, Shareholders Agreement and the Financing Agreements.
The IGA was a pointer to the decision of the two countries to embark on developing the pipeline
On August 5, 2017, Ugandan President Yoweri Museveni and his Tanzanian counterpart John Magufuli laid a foundation stone at the end point of the 1,443km conduit at Chongoleani near port Tanga.
On November 9 and 11, 2017, both presidents laid the Cross Border Mark stone at Ruzinga village, Mutukula-Kyotera district and a foundation stone at the starting point of the pipeline at Kabaale in Hoima respectively.
The Front End Engineering Design (FEED) studies for the East African Crude Oil Pipeline Project and the optimization of these studies have been successfully completed. These studies have developed the project Basic Engineering which specifies how the pipeline and the Above the Ground Installations are going to be constructed.
Following the successful completion of the FEED studies, and the FEED optimizations studies for the EACOP, the project is currently progressing with the selection of the Engineering Procurement and Construction Management (EPCm) contractor.
Discussion on Host Government Agreement (HGA) and the establishment of the pipeline company are also ongoing. These elements together with the Environmental and Social Impact Assessment (ESIA), the Geophysical and the Geotechnical Studies and land acquisition for priority lands are currently being undertaken in both countries.
These have to be completed prior to taking the Final Investment Decision (FID). This will lead to project execution and construction phase of the pipeline.
11. What is FEED?
Front End Engineering Design (FEED) is the basic engineering study conducted to detail and finalizes the technical design of the project. It is an engineering design practice that ensures thorough description of the project and construction scope of work, allowing the tendering process for the selection of the construction contractors.
Therefore, the FEED will develop the EACOP project Basic Engineering that will for the basis for the Detailed Engineering, the Final Investment Decision and the lead to the construction phase of the pipeline.
The FEED activities included pipeline corridor reduction from 2km to 3o Meters width using technical, environmental and social data collected through surveys, definitions of the project standards, design of all components (pipeline, insulation, pumps, power generators, valves etc.).
The FEED deliverable included project construction specifications, basis of design, alignment of sheets, plot plan layouts, project execution plan, schedule, cost estimates and call for tender preparations.
12. When will the construction of the East African Crude Oil Pipeline start?
Pipeline construction will start after the FID and will last approximately 36 months. The first activities will be the construction of the coating plant at Isaka in Tanzania where the pipes will be coated and insulated, then civil works for the construction camps to accommodate people and equipment.
There will be twelve (12) camps in Tanzania and four (4) in Uganda.
Following that, the construction of the pipeline will begin-the corridor will be cleared and the pipes installed along the future trench, then welded into the ground, properly jointed, lowered in the trench that will be backfilled. Temporary crossings will be setup for people or animal herds to cross.
13. What happens to the pipeline when the oil is depleted?
Once the oil from Lake Albert is depleted, (about 3 decades from now) it is possible that other discoveries of oil may have been made in Uganda or in neighboring countries like Tanzania, DR Congo and South Sudan. The physical life of a pipeline is much longer than that required for Lake Albert crude export.
Generally, when pipelines have been built, it is much cheaper for any other crude oil to be produced and exported through the line. Even some small oil fields may be economically viable because of the existence of the conduit.
However, once all the relevant parties at the time decide that the pipeline is not required, then the abandonment phase can be commenced. With a buried pipeline like EACOP, it might cause less environmental impact to flash it clean and leave it in the ground. This will all be subject to environmental scrutiny and governmental approvals.
14. What will the oil tariff be after the construction of the East African Crude Oil Pipeline?
The tariff is dependent on the financial cost of the project among other key perimeters. The final will be known after the completion of the FEED and the attribution of the construction contracts to the pipeline, Above Ground Installations and the Marine Storage Terminal construction.
15. Who owns the East African Crude Oil Pipeline project?
The EACOP is a Private Sector led project and will be owned by the shareholders of the project namely; The Government of Uganda (UNOC) and The Government of Tanzania (TPDC) and the three upstream companies CNOOC, Total and Tullow who collectively seek to ship and export the crude oil.
An independent Pipeline Company will be established and it will enter into a number of contractors and agreements: with the host government over whose territory the pipeline will pass, with the Lake Albert Upstream Partners for the transportation terms, with contractors to build the pipeline and all of the necessary facilities.
The Pipeline Company will be the owner of the pipeline facilities; however it will not own the oil that is being shipped through its facilities. The Pipeline Company will operate the pipeline and will have responsibility for the long term safe and uninterrupted operations of the pipeline.
16. How much will the East African Crude Oil Pipeline project cost?
The estimated cost of the EACOP project is $3.5 billion. The $3.5 Billion investment capital associated with the project will be directly injected into the economy of both Tanzania and Uganda, increasing their Foreign Direct Investment to up to 60% during the construction phase.
17. Who will finance The East African Crude Oil Pipeline project?
The project will be financed by the Pipeline Company shareholders equity and loans. Banks and financial institutions will provide a large part of capital for the project.
An estimated 70% is the targeted level of debt toward the project. The remaining 30% will be financed by both governments and the Joint Venture Partners; CNOOC, Total and Tullow Oil Plc through their equity.
18. Will The East African Crude Oil Pipeline project bring jobs to local communities?
People will be employed during the construction and operation phases of the project. The EACOP has reiterated commitment to reinforcing the use of local workers and contractors through training programs and support to local companies by strengthening their skills and capacities, creating direct and indirect employment and supporting local content and procurement.
The Pipeline will create short term employment during construction (2.3 years) and skills development that can be used in other infrastructure projects.
It is expected that casual worker who will be involved in the construction phase of the proposed project will be sourced locally, from the vicinity of the project, which will further promote the development of local capacity.
All employment opportunities available during the construction period, including the requirement specifics to this employment, will be communicated in such a way as to make these opportunities available to as many people as possible.
19. What will be the benefit of The East African Crude Oil pipeline project?
EACOP has benefits to both Uganda and Tanzania which include job creation, local content, new infrastructure, logistics, technology transfer and enhancement of the central corridor between Uganda and Tanzania.
The most important direct benefit that will arise from the crude oil pipeline will be increase in Foreign Direct Investments for both countries. Local/National content is a key value for EACOP project participants and will be fully integrated in the contracting strategy as well as the training programs.
A local content plan is being developed to guide the implementation process. It is expected that the Pipeline will provide training to people involved in its implementation, from welders through to pipeline operation staff, who will largely comprise of nationals sourced locally from the vicinity of the project.
In doing so, this increase in their capacity will benefit these groups in the long term since they will be able to work for similar projects or other additional industries in the future