Tanzania sees Uganda gas pipeline kicking off in the coming years

By Ken Karuri on 9/27/2018

DAR ES SALAAM, Tanzania (Bloomberg) -- The Tanzania Petroleum Development Corp. is confident a natural-gas pipeline to Uganda will start in 2021, according to acting Managing Director Kapuulya Musomba.

At least 29 companies have shown interest in conducting a feasibility study and constructing the pipeline that will pump gas to western Uganda to power iron and steel factories, Musomba said in an interview in Tanzania’s commercial hub, Dar es Salaam. He didn’t provide any names.

“We expect the feasibility study to be concluded by June next year,” he said on the sidelines of an oil and gas conference. Funding will be sought in 2019 and 2020 “and then construction will start in 2021.”

TPDC set an Aug. 24 deadline for submission of tender documents to conduct the study. Tanzania and Uganda have already signed an agreement for the pipeline that will start in Dar es Salaam, pass through Tanga port on the Indian Ocean and Mwanza, a port city on Lake Victoria, before crossing to Uganda.

Oil & Gas

The two nations plan a separate pipeline to transport Uganda’s crude to Tanga port. Tanzania is positioning itself to become an energy hub within a decade and plans to supply gas, of which it has about 57 Tcf of proven reserves, to other east African nations.

“About 10 to 15 regions in East Africa will benefit from the pipeline that will also serve as a catalyst for oil and gas exploration,” Musomba said.

The state intends to connect seven factories with natural gas during this financial year and at least 80 companies in the next four years, he said.

Musomba is optimistic gas will finally be pumped from the $30-billion planned liquefied natural-gas plant in Lindi region by 2026-2027. Negotiations for the stalled project are still on with companies including ExxonMobil Corp., and Equinor ASA, he said.

Construction of the plant that will have the capacity to process 10 million metric tons annually was initially scheduled for completion in 2020, according to TPDC. When complete, it will add to projects in Mozambique, making the region a hub for the fuel.

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