The governments of Tanzania and Uganda on Thursday signed a non-binding agreement with the Bahrain unit of global commodities trader Vitol to develop a regional energy hub at the Port of Tanga, Tanzania.
It was not clear what would eventually be built at Tanga and at what cost, although Tanzania’s government said potential investments in new infrastructure, such as storage facilities, could top $20 billion.
- The agreement brings together the Tanzania Petroleum Development Corp, Uganda National Oil Co (UNOC) and Vitol Bahrain.
- Tanga is emerging as a key energy node that will help supply refined products to inland countries such as Rwanda and is also the end point for the EACOP pipeline that will move crude oil from Uganda to global export markets.
- Uganda is due to start pumping crude later this year.
- Vitol Bahrain is the exclusive supplier of all petroleum products to Uganda and last year signed a $2 billion deal with UNOC that helped it secure a 20.15% stake in Kenya Pipeline Co KPC.NR at its public listing in March.
- Uganda imports approximately 95% of its petroleum products, amounting to nearly 2.96 billion litres annually, through Kenya via the Port of Mombasa and the KPC pipeline system.