Africa-Press – Uganda. The signing of the Host Government Agreement was delayed to sort out some issues.
The Tanzanian government yesterday signed the Host Government Agreement (HGA) for the proposed East African Crude Oil Pipeline (EACOP), effectively committing to and paving way for the next project development phase.
The HGA, signed yesterday at a ceremony witnessed by Tanzanian President Samia Suluhu Hassan and President Museveni in Dar-es-Salaam, establishes the legal and commercial framework for the proposed 1,443km oil duct running from Hoima in western Uganda to Chongleani Terminal at Tanga port at the Indian Ocean.
EACOP company general manager Martin Tiffen and Total E&P Africa president for exploration and production Nicolas Terraz signed on behalf of the EACOP company, and Tanzania’s energy minister, Dr Medard Kalemani, on the other side.
The signing of the Tanzania HGA was deferred from the signing ceremony held at State House Entebbe on April 11 to fine tune several issues, including Tanzania’s 15 shareholding equity.
The other shareholders in the EACOP company are Uganda through its Uganda National Oil Company (Unoc), Total Holdings International B.V. with 62 per cent, and oil company Cnooc with eight per cent.
According to a press release shared by State House, President Museveni cautioned against excitement from the oncoming oil bonanza as it is finite and rather it should be used in the four sectors that drive jobs and wealth creation including commercial agriculture, industrialisation, services including tourism, banking, entertainment and Information Communication Technology.
“People always demand for social services including health, education etc but how do you sustain services without production of wealth and jobs,” Mr Museveni was quoted as saying.
The President further described the signing of the HGA as a historic event and a very important regional project that will not only benefit Uganda and Tanzania but will also in the long run serve countries in the Great Lakes region.
“The pipeline is a very important regional project, Tanzania and Mozambique you have gas and the corridor can be used to take another pipeline for gas to help countries in the great lakes region with the resource. What we are doing here today is really historic. I congratulate the government of Tanzania and President Samia Suluhu for this achievement,” he said.
Mr Terraz said the signing of the second HGA confirms that Tanzania “will participate not just as a host government but also as an investor.”
“We are at the beginning of the journey and it will take four years to construct the pipeline. It is very important that we maintain the dedication we have showed to maintain the project for the next 25 years,” he added.
The construction of the $3.55b (Shs13 trillion) project is expected to start in Tanzania, officials revealed last month, where the land tenure system is less laborious.
The construction start date remains unknown but officials are optimistic to fast-track all remaining project pre-construction activities for development to start later this year.
Eighty per cent of the pipeline, 1,147km, will be on the Tanzanian side, and it is estimated that 80 per cent of the $3.55b project capex will be spent in Tanzania.
Previously
In April, three agreements for development of the proposed East African Crude Oil Pipeline (EACOP) were signed in Kampala.
These include the Host Government Agreement (HGA) for Uganda, the Shareholders Agreement, and the Tariff and Transportation Agreement.
