The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | The Final Investment Decision (FID) for the East African Crude oil project is expected before the end of September 2024 according to Energy Minister, Ruth Nankabirwa.
Three billion dollars in debt financing is required for the financial close of the five billion dollar pipeline that will transport Uganda’s crude oil from Kabaale – Hoima in Uganda to the Chongoleani peninsula near Tanga port in Tanzania.
Nankabirwa told the mid-year oil and gas sector media briefing that she recently traveled to China to meet the Chinese President, Xi Jinping, and the Chinese banks over the financing of EACOP.
“I was promised that this month of September, we expect to seal this. That is what I was told. And so we are continuing to pursue this,” said Nankabirwa.
She declined to name the Chinese banks that she met apart from indicating that they included EXIM Bank.
“We have high hopes that very soon we shall hear FID announced,”
The EACOP project has fairly progressed despite local and international pressure to stop its construction. It is currently in the engineering and procurement phase. Construction of the pipeline will kick off once funds are available.
The EACOP Company shareholders have been financing most of the project activities to the tune of two billion dollars. The shareholders include the project’s lead developer- Totalenergies, China National Offshore Corporation (CNOOC), Uganda National Oil Company (UNOC), and Tanzanian Petroleum Development Corporation (TPDC).
Nankabirwa confirmed that the shareholder had to raise more funds to bridge the gap after the project had exhausted equity.
“Because we had exhausted equity and this FID was not coming, shareholders increased the equity. Uganda paid, Tanzania paid, Total paid and CNOOC paid. So we are able to do work. Right now, we are not stranded,”
Nankabirwa reported that significant progress has been made on the East African Crude Oil Pipeline (EACOP) since the EACOP Company was granted a Construction License in 2023. She said civil works to commence at the Main Camps and Pipe Yards in Hoima and Sembabule districts.
The minister said Engineering; Procurement, Construction Management and Commissioning (EPCMC) activities for the EACOP project are ongoing in London and Dar es Salaam.
“Worley is undertaking this work with its subcontractors – ICS Engineering in Uganda and Norplan in Tanzania. The overall progress of the EPCMC activities was at 39.2%; the engineering phase was at 81.1%, procurement was at 54.5%, and construction and commissioning at 15.4%. Detailed engineering, being carried out by Worley, was at 89.1%, surpassing the planned 88.3%, “she revealed.
According to Nankabirwa, the construction of the thermal insulation plant in Nzega District, Tabora region in Tanzania was completed and commissioned on 26th March 2024.
She said China Petroleum Pipeline Engineering Ltd (CPP), the pipeline construction contractor, has begun civil works at the pump stations and Main Camp and Pipe Yard sites in Uganda and Tanzania.
She further revealed that early civil works were ongoing in Uganda and Tanzania. “In Uganda, work has been completed at three of the five main camps and Pipe Yard located in Hoima, Kakumiro, and Sembabule districts, while work continues at the Mubende and Kyotera districts,” she said.
Land Acquisition The EACOP project spans approximately 2,740 acres in Uganda, affecting 3,660 individuals, with 177 requiring resettlement housing.
The Minister said all resettlement houses have been constructed and handed over. “So far, 95% of affected persons have received compensation, and 97% have signed compensation agreements, with remaining payments ongoing.
However, there are 112 cases under consideration for compulsory land acquisition due to issues such as untraceable individuals, landowner disputes, refusal of compensation offers, and lack of legal title,”
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