The World’s Longest Crude Export Pipeline: All You Need To Know About The Uganda, Tanzania Deal

Uganda and Tanzania have signed a framework agreement to build the world’s longest crude export pipeline.

The two countries agreed on the proposed $3.55 billion crude export pipeline on Friday, a key milestone for the project, which is expected to start pumping Ugandan oil to international markets within three years.

Uganda’s Ministry of Energy has said the pipeline will be complete in 2020. An official of the ministry told Reuters the agreement covered terms on tax incentives for the project, implementation timelines, the size of the pipeline and local content levels.

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Irene Muloni, Uganda’s energy minister, said construction of the pipeline would “facilitate and boost trade in the region” and create over 10,000 jobs. She said the agreement stipulated that Uganda would pay an estimated transit tariff of $12.20 per barrel for pumping its oil through the pipeline.

She revealed without talking specifics that Tanzania had offered a “fiscal incentives package” that led Uganda to choose it over Kenya as the favored host for the pipeline.

Total E&P manager in Uganda, Adewale Fayemi, said the project will become “the longest electrically heated crude oil pipeline in the world”.

He told Reuters that it was a record, adding that it will increase the flow of foreign direct investment and open a new phase of economic development in the region when completed.

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The world’s longest crude export pipeline will be 1,445 km-long with a 24-inch diameter. It will also be heated so it can keep highly viscous crude oil liquid enough to flow. The pipeline will begin in landlocked Uganda’s western region, where crude reserves were discovered in 2006, and terminate at Tanzania’s Indian Ocean seaport of Tanga.

Total is one of the owners of Ugandan oilfields, alongside China’s CNOOC and Britain’s Tullow Oil. Total has said it is willing to fund the pipeline’s construction but not what stake it will own in the project.

Uganda estimates overall crude reserves at 6.5 billion barrels, while recoverable reserves are seen at between 1.4 billion and 1.7 billion barrels.