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.
///Cue In “They were
nine in the...
Cue Out…and they
have joined”///
“ 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,”
///Cue
In “ We are able to do.....
Cue
Out ….. until FID is announced”///
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,”
