Uganda approves construction of US $3.5bn crude pipeline project

The government of Uganda has approved construction of a crude pipeline project worth US $3.5bn. The country’s cabinet approved the application to construct the pipeline by the East African Crude Oil Pipeline Company Ltd (EACOP).

TotalEnergies is the largest shareholder in EACOP with a 62% stake. Other investors include the state-run Uganda National Oil Company and Tanzania Petroleum Development Corporation, which have 15% each, while China’s CNOOC (0883.HK) holds 8%. In February 2022, TotalEnergies EP Uganda, CNOOC Uganda Limited, the Uganda National Oil Company (UNOC), and the Tanzania Petroleum Development Corporation (TPDC) announced that they had reached the Final Investment Decision (FID) for the upstream oil production projects and the East African Crude Oil Pipeline (EACOP).

Planned pipeline

The planned pipeline will run from landlocked Uganda’s oilfields in the country’s west to Tanzania’s Indian Ocean port of Tanga, a distance of 1,445 kilometres. It is expected to transport the country’s crude to international markets.

The project aims to extract the huge crude reserves under Lake Albert, a 160-kilometre-long natural border between Uganda and the Democratic Republic of Congo, and ship the oil through what would become the world’s longest heated pipeline.

The project, which includes drilling in Murchison Falls, Uganda’s largest national park, has however also run into strong opposition from activists and environmental groups who have mounted a campaign against the project which they say will displace tens of thousands of people and endanger fragile ecosystems in the region.

Approximately 1.4 billion of Uganda’s 6.5 billion barrels of proven oil reserves, located mostly on its western border with the DRC, are estimated to be economically recoverable.  French firm TotalEnergies, and CNOOC, hold licenses to develop these resources.