Construction Of Oil Pipeline Deadline Set For 2020

Construction Of Oil Pipeline Deadline Set For 2020

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By Ivan Balikuddembe

Kampala, Uganda: Construction of the crude oil pipeline that will transport Uganda’s oil from the Albertine Graben to the refinery in Tanzania is steadily taking shape.

We revealed on this website recently that President John Magufuli had sent a delegation from  Tanzania to spearhead negotiations with the Ugandan team about the Host Government Agreement  for the pipeline. The latest development is that Uganda and Tanzania have agreed to complete and sign a Host Government Agreement for the East Africa Crude oil Pipeline by end of June this year. The main objective is that all the final investment decisions for the pipeline, refinery and general developments should have been concluded by end of June for first oil 2021/2022. That means that construction for the Pipeline has to start and at least be completed between 2019 and 2022.  The protracted negotiations at Kampala Serena Hotel ended on Friday with each of the sides pushing to ensure that they benefit the pipeline whose construction will cost over USD3.5 billion.

According to sources privy to the negotiations, there was a disagreement on revenue sharing, taxation especially corporate income tax and local content in terms of jobs during the construction of the over 1400 kilometre pipeline from Hoima in Uganda to Tanga in Tanzania. Uganda was represented by Energy Minister, Irene Muloni, Lands Minister Betty Amongi, Deputy Attorney General Mwesigwa Rukutana and Energy Permanent Secretary, Robert Kasande and Finance Minister MatiaKasaijja, who joined the negotiations as a vital stakeholder. Tanzanian was represented by energy Minister, Dr. Medard Kilimani, Professor, Palamagamba Kabudi, the Minister of Constitutional and Legal Affairs from Tanzania and January Makamba from the Tanzania’s presidency among others.

 

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