Confusion in East Africa Over Export Oil Pipeline Route

Months after the Kenyan and Ugandan president reached a deal to have the pipeline go through northern Kenya to the Kenyan coast the pronouncement has been thrown into a spin with Museveni’s visit to Tanzania to discuss about the southern route.

Already a number of media sources have come out to say that the two East African presidents agreed on the southern route through Tanzania to the port of Tanga.

The southern route which would total 1100 kilometers (approx. 700 miles) is much shorter than the 1500 kilometres long Uganda’s oil fields to the Kenyan port of Lamu on the Indian Ocean routes.

We discussed plans to build a 1120KM oil pipeline between Tanga and Uganda, which is expected to employ 1500 people. pic.twitter.com/YkzZ174bv5

— Yoweri K Museveni (@KagutaMuseveni) March 1, 2016

This development could be a big blow to Kenya and the Lamu Port Southern Sudan-Ethiopia Transport (LAPSSET) Corridor project a transport infrastructure project scheme shared by several East African countries including Kenya, Ethiopia, South Sudan and Uganda.

The announcement also follows the signing of a Memorandum of Understanding on the crude oil pipeline development principles between the Government of the Republic of Uganda, the Government of the United Republic of Tanzania, the Tanzanian Petroleum Development Corporation and Total E&P Uganda in October 2015.

Total E&P which is the main supporter of the southern route has pointed at security concerns in the northern route as its main reason for its dissent.

Among the main losers if such a deal was to go through other than the Kenyan government are joint partners in the Kenyan oil blocks who include Tullow Oil, Africa Oil and Maersk Oil who might face delays in evacuating their crude portions.

The milestone however doesn’t come as a surprise as there have been signs all over the place with the Kenyan government late last year cited to have been working on a road and rail evacuation strategy that would allow exports as early as late 2016.

If confirmed the decision by Uganda to take the southern route could also throw to jeopardy financing for the Uganda refinery in which Kenya had confirmed it will take up stake.

All is however not lost as there remains a neutral southern route through southern Kenya to the Kenyan port of Mombasa that eliminates the security risk and is the shorter of both routes.